Robert Zirkelbach, Chief Public Affairs Officer at PhRMA, said the 340B Drug Pricing Program has gone "off the rails" after a private equity-backed hospital chain cited 340B eligibility as a financial benefit in its conversion to nonprofit status.
"This is exactly how far 340B has gone off the rails: A private equity-backed hospital chain is converting to nonprofit status and pointing to 340B as a way to add $11M annually to its bottom line. A program meant to help vulnerable patients shouldn't be treated like a business strategy," said Zirkelbach on X.
Quorum Health, a nationwide private equity-backed hospital chain operating in nine states, announced plans to convert to a nonprofit business model, citing 340B Drug Pricing Program eligibility as a benefit that will bring $11 million in value every year, along with $13 million in annual tax exemption savings. The company said 75 percent of its facilities serve as the sole providers for patients in their communities, and that the nonprofit conversion will allow it to reinvest in hospitals and surrounding communities as part of a "mission-driven" care delivery plan, according to HealthExec.
The program does not require hospitals to report how much money they make through 340B or how the funds are spent. Research on nonprofit hospitals shows most do not direct the majority of their 340B revenue toward helping low-income patients, according to the Paragon Health Institute.
A 2024 report by the Alliance for Integrity and Reform of 340B found that 85 percent of disproportionate share hospitals earn more in 340B profit than they spend on charity care. In 2022 alone, those hospitals earned $44 billion in 340B profit but spent only $18 billion, just 42 percent of those profits, on charity care, according to PR Newswire.
Zirkelbach serves as chief public affairs officer and head of strategic initiatives at PhRMA, which represents leading pharmaceutical research and biotechnology companies in the United States, according to PhRMA.
