Molly Jenkins, Director of Public Affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA), said that the 340B program imposes higher costs on Medicaid and contributes to nearly $2 billion in lost tax revenue. This statement was made in a blog post.
"There is also evidence that 340B is harming state and federal budgets, with higher costs imposed on Medicaid and nearly $2 billion in lost tax revenue as a result of 340B markups," said Jenkins.
The 340B Drug Pricing Program, established in 1992, allows certain healthcare providers to purchase outpatient drugs at reduced prices. These savings are intended to support care for low-income and uninsured patients. The program is managed by the Health Resources and Services Administration.
According to the U.S. Government Accountability Office (GAO), covered entities purchased approximately $6.1 billion in 340B drugs in 2018. Despite the program's scale, the GAO reported limited information on how those savings were applied by providers and recommended enhanced oversight to ensure the program meets its intended purpose.
A study published in Health Affairs found that many 340B contract pharmacy arrangements in 2019 involved for-profit pharmacies retaining a large share of the profit margin between drug acquisition and reimbursement. The research indicated that these profits often did not flow back to safety-net providers, leading authors to conclude that current arrangements may reduce the program’s effectiveness in serving vulnerable patients.
Jenkins leads communication initiatives on healthcare costs at PhRMA. She previously worked with Representative Greg Walden and the House Energy and Commerce Committee in communications roles and earned a master’s degree in Health Communication from Johns Hopkins University.
