Lori M. Reilly, chief operating officer of PhRMA, said on May 18 that more people are taking a closer look at the federal 340B Drug Pricing Program due to concerns about waste, fraud and abuse, rising markups and limited accountability.
“More people are taking a closer look at 340B — and for good reason,” Reilly said in a social media post. “A new Fox Business segment highlights concerns about waste, fraud & abuse, rising markups and a lack of accountability in a program that was supposed to help patients.”
The 340B Drug Pricing Program allows eligible hospitals and clinics to buy outpatient medicines at significantly reduced prices. The program’s stated purpose is to help covered entities stretch scarce federal resources, reach more eligible patients and provide more comprehensive services, according to the Health Resources & Services Administration.
In calendar year 2024, covered entities purchased $81.4 billion in covered outpatient drugs under the program, federal health data shows.
Under the program’s structure, hospitals and clinics can generate revenue when insurance reimbursement exceeds the discounted 340B acquisition price of a drug. The U.S. Government Accountability Office has noted that program safeguards are intended to prevent diversion of discounted drugs to ineligible patients and to avoid duplicate discounts, which occur when both a 340B discount and a Medicaid rebate are applied to the same drug.
Lori M. Reilly is Chief Operating Officer at PhRMA, where she provides executive-level management, leadership and strategic direction. Her role includes oversight of PhRMA’s advocacy activities, including federal, state and international government affairs and alliance development work.
