Anthony DiGiorgio, assistant professor of neurological surgery for the University of California, San Francisco, said the 340B drug discount program raises costs for taxpayers and employer plans and should be tightened through oversight and targeted reforms.
"340B advocates will lie to you while taking money out of your pocket," said DiGiorgio, Neurosurgeon. "They claim here that the program costs taxpayers $0. Research has shown that the 340B program increases healthcare costs by over $1B for state and local governments with costs per beneficiary 10% higher simply because of this one program. Gard working Americans are paying more for their insurance because of 340B. At least when pharma makes a profit they provide a product and pay taxes. 340B hospitals simply extract wealth."
According to DiGiorgio, higher premiums and public-plan spending are linked to 340B incentives. The Health Resources and Services Administration (HRSA) describes the 340B program as requiring manufacturers to provide outpatient drug discounts to eligible entities, while these entities can dispense drugs to insured patients under standard billing rules. This design can result in spread revenue.
The Congressional Budget Office (CBO) reported that the 340B program "encourages behaviors" that may increase federal spending, such as prescribing more drugs and higher-priced drugs and expanding services. The CBO also noted that integration between hospitals and off-site clinics contributes to program growth but acknowledged limited evidence on the size of each effect.
The Government Accountability Office (GAO) has identified weaknesses in HRSA's oversight of the program, including issues with eligibility, contract pharmacy use, audit processes, and duplicate-discount prevention. The GAO reported that contract pharmacy arrangements are widely used and complicate compliance monitoring, continuing to issue recommendations related to enforcement and oversight mechanisms.
An analysis by IQVIA submitted to the Vermont legislature estimated that the 340B program increased healthcare costs for state and local governments by approximately $1 billion. It found that costs per covered beneficiary were about 10% higher due to government plan spending. The analysis also indicated higher costs for employer-sponsored plans due to rebate displacement and increased net spending, with significant variation across states.
DiGiorgio is a neurosurgeon specializing in spine and brain conditions at UCSF. His clinical work includes traumatic brain injury and spinal cord injury research. He completed his neurosurgery residency at LSU Health Sciences Center New Orleans with additional training at UCSF.
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