Founder of ReKlaim Health on 340B program: '340B was supposed to help poor patients'

Dutch Rojas, founder of ReKlaim Health, said that the 340B program has deviated from its original mission to assist low-income patients and instead allows health systems to profit from drug pricing arbitrage. The statement was made on X.

"340B was supposed to help poor patients get affordable drugs," said Rojas. "Instead, health systems buy drugs cheap and bill insurers full price. They don't pass it to patients. It's a drug arbitrage racket with a halo slapped on top."

According to the San Francisco Chronicle, critics argue that the 340B program is being misused by health systems that benefit from drug discounts without ensuring patient benefits. Reports in California have highlighted instances where hospitals purchase discounted drugs under the 340B program, resell them at higher prices through contract pharmacies, and retain the profits without reinvesting in underserved communities. This practice is seen as a deviation from the program’s intended safety-net purpose.

Estimates indicate that hospitals generate substantial revenue from the 340B program beyond their expenditures on charity care. An AIR340B report revealed that Disproportionate Share Hospitals earned $44.1 billion in 340B profits in 2022 but only spent $18.5 billion on charity care, with 85% of facilities earning more from discounts than they provided in free care. The National Pharmaceutical Council (NPC) similarly estimated $13 billion in profits in 2018.

As reported by PhRMA, research suggests that 340B hospitals do not consistently pass savings onto patients. A JAMA-Open study found drug spending was nearly 200% higher at 340B hospitals compared to non-340B hospitals. A report from the North Carolina Treasurer’s Office indicated that 340B hospitals averaged $6,026 profit per claim and sometimes billed up to 12.7 times their acquisition costs for oncology drugs, implying patients may pay more despite available discounts.

Rojas is a healthcare entrepreneur focused on transparency and affordability. He previously founded Sano Surgery, which developed bundled-price surgical networks, and co-founded Everyone Health and Bliksem Health to support independent physician practices. According to the Garden State Times, his work emphasizes defending physician ownership and leveraging innovation to reduce costs and enhance patient access.