A recent article in the New York Times, “A Little-Known Windfall for Some Hospitals, Now Facing Big Cuts,” gives a thoroughly inaccurate and misleading view of the 340B Drug Pricing Program. The program is paid for through discounts from the big drug companies’ high markups that do not cost the government a single penny, but help thousands of vulnerable communities around the nation.


And, the program accounts for less than two percent of drug companies’ revenues, allowing them to continue to reap double-digit profit margins.

For more than 25 years, the program has been critical in helping hospitals expand access to lifesaving prescription drugs and comprehensive health services to vulnerable patients and communities. These savings allow hospitals to provide an expanded range of health services, such as free vaccines, transportation to follow-up appointments and to fund oncology services for cancer patients that might otherwise be unavailable.


An analysis released earlier this year by the AHA showed that 340B tax-exempt hospitals provided more than $50 billion in total benefits to their communities in 2015 alone.


In a Congressionally mandated report, the U.S. Government Accountability Office confirmed that the 340B program is working as Congress intended, finding that hospitals have used the additional resources to provide critical health care services to communities with underserved populations that could not otherwise afford these services.


Thompson is AHA Senior Vice President of Public Policy Analysis and Development