A program that works exactly as intended
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“If it ain’t broke, don’t fix it” might be a cliché, but when it comes to healthcare policy, it’s sage wisdom. It certainly applies to a small but critically important drug discount program with a quarter century of success at supporting safety-net health providers and expanding life-saving care for millions of our most vulnerable Americans.

Enacted in 1992 with overwhelming bipartisan support and signed by President George H.W. Bush, the 340B drug discount program lowers drug costs for medical providers that disproportionately care for low-income patients — at no cost to taxpayers. Under 340B, which is named for Section 340B of the Public Health Service Act, pharmaceutical manufacturers extend discounts on outpatient drugs to safety-net providers as a condition of participating in Medicaid and Medicare Part B. Providers use their program savings to provide drugs to low-income patients for free or at reduced cost and provide critical healthcare services to needy populations, just as the program was designed to do.  I am proud to have been an original author of the 340B law and have supported successful bipartisan efforts to expand the program to children’s and rural hospitals.

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Unfortunately, program critics are preparing legislation that would gut 340B, crippling the ability of low-income patients to receive the care they need, and a coalition headed by giant pharmaceutical companies has proposed program “reforms” that would significantly narrow the scope of 340B. It would be a grievous error — and injustice —for Congress to act on any such changes, especially at a time when it is considering legislation that would increase the number of uninsured Americans by 24 million.

Only providers caring for large numbers of poor and vulnerable patients are eligible for 340B. These include public and non-profit hospitals serving low-income populations, community health centers, urban Indian clinics, Native Hawaiian health centers, HIV/AIDS and hemophilia treatment centers, and black lung, tuberculosis, homeless and Title X public housing and family planning clinics.

The millions who benefit from 340B include Debbie Scott of Uriah, Ala.  She was diagnosed with colon cancer in 2010 at a time that both she and her husband were out of work –and uninsured.  After surgery, Scott started a 6-month round of chemo in early 2011 at Monroe County Hospital in Monroeville, Ala., still unsure how she would be able to pay for the treatment.  As it turned out, that wasn’t a problem thanks to the 340B program which enabled the hospital to cover her costs.  Debbie is alive and well today thanks to the 340B program. 

In 2012, Michael Asip of San Mateo, Calif., had a heart attack.  He needed treatment but he didn’t have insurance.  He landed at San Mateo Medical Center.  There, he received all manner of clinical services – paid for, in part by 340B.  Michael saw a cardiologist and an endocrinologist.  Asip receives several maintenance medications, including medication to control blood sugar and another for cholesterol control, at half price thanks to 340B. 

For Dorian-Gray Alexander of New Orleans, 340B was also a lifesaver. In 2005, he was diagnosed with AIDS. He had health coverage at the time, but the next year, his insurer cancelled his policy. Fortunately, his provider — the CrescentCare HIV/AIDS Clinic — participates in 340B. As a result, he receives free medication that would otherwise cost $2,300 a month. Notably, 340B savings enabled CrescentCare to double the patients it serves.

The anti-340B coalition ignores these real world outcomes and instead spreads myths that need to be refuted. For example, they argue that too many providers participate. Yet 340B hospitals provide 60 percent of all uncompensated care, even though they account for only about one third of hospitals, and they treat 64 percent more Medicaid and low-income Medicare patients.

Opponents also argue that the Affordable Care Act made 340B unnecessary. Though the law brought uninsurance rates to record lows, 27 million Americans will remain uninsured over the next 10 years, according to the Congressional Budget Office — more than enough to justify 340B’s continuation. Moreover, that number would increase if the Trump administration undermines the Affordable Care Act, and it would almost double if Congress passes the American Health Care Act. 340B providers also continue to be underpaid by Medicaid and struggle to meet the needs of their underinsured low-income patients.

Opponents further argue that 340B is a drain on drug companies. Yet it represents just 2.6 percent of the $457 billion U.S. drug market and hasn’t prevented industry profits from hitting record highs. It’s a shame big pharmaceutical companies would rather goose their profits than take credit for all the good their participation in 340B is doing for so many people.

Neither greed nor disingenuous arguments are good reason to “fix” what isn’t broken. Instead, Congress — and the pharmaceutical industry — should celebrate and support 340B and its 25 years of achievement in strengthening our health care safety net.

Henry A. Waxman, a past chairman of the House Energy and Commerce and House Oversight and Government Reform Committees, represented California’s 33rd District from 1975 to 2015. He is the chairman of the public affairs firm Waxman Strategies, which represents a range of safety net providers who rely on the 340B drug discount program.


The views expressed by this author are their own and are not the views of The Hill.