Ryan Long, Director and Senior Research Fellow at Paragon Health Institute, expressed concerns about the 340B Drug Pricing Program's impact on wealthier hospitals, costs, and safety-net providers. His statement was published in a Washington Examiner op-ed.
"the heart of the problem is the program's ‘buy low, sell high' mechanism," said Long, Director of Congressional Relations & Senior Research Fellow, according to Washington Examiner. "This spread pricing perversely ensures that those who need the most assistance receive the least, while entities that need the least get the most. A single oncologist can yield $1 million in annual 340B profits. Reform must eliminate ‘the spread' as a mechanism for generating revenue."
The 340B Drug Pricing Program, established by Congress in 1992, mandates that manufacturers offer outpatient drugs to eligible "covered entities" at significant discounts. This initiative aims to help safety-net providers extend their resources and serve more patients. Since its inception, participation has increased significantly, with covered-entity sites rising from just over 8,100 in 2000 to approximately 50,000 in 2020. Hospitals account for slightly over 60% of these sites, indicating a substantial increase in hospital involvement.
According to a study published by Health Affairs Scholar in 2024, hospitals participating in the 340B program have generated considerable profits from discounted drug purchases. However, there is limited evidence that these savings have enhanced access or affordability for low-income patients. The researchers concluded that most hospitals within the program did not provide higher levels of charity care compared to those outside it.
A July 2024 interim staff report by the Federal Trade Commission (FTC) highlights concerns regarding dominant, vertically integrated Pharmacy Benefit Managers (PBMs). The report suggests that PBMs can inflate costs and restrict access through practices such as spread pricing and rebate-driven formularies. It also notes misaligned incentives that may increase patient costs and limit choices. The FTC continues its inquiry into PBM conduct and market power.
Long serves as Director of Congressional Relations & Senior Research Fellow at Paragon Health Institute. He is responsible for engaging with Congress by communicating Paragon’s research and proposals to lawmakers and staff. Additionally, he leads the Congressional Health Policy Education Program and authors policy analyses promoting market-based reforms. Long holds degrees from the University of North Carolina at Chapel Hill and Catholic University’s Columbus School of Law.
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