But instead of strengthening 340B’s ability to help New York’s most vulnerable, new language in the State Senate’s budget proposal threatens to not only
As federal Medicaid dollars tighten and the cost of living continues to squeeze countless families, there’s never been a more critical time for policymakers in Albany to fight for affordable access to healthcare for those who need it most.and the cost of living continues to squeeze countless families, there’s never been a more critical time for policymakers in Albany to fight for affordable access to healthcare for those who need it most.
For countless New Yorkers, that means making sure the federal 340B Drug Discount Program works the way it was intended by helping safety-net hospitals deliver discounted prescription drugs to low-income patients. But instead of strengthening 340B’s ability to help New York’s most vulnerable, new language in the State Senate’s budget proposal threatens to not only deepenby failing to close the loopholes large hospitals and chain pharmacies have used to exploit it, but do so without adding any new transparency measures or safeguards to ensure 340B funds are even reaching the communities where they would do the most good.
To illustrate the issue, data suggests a troubling and significant disconnect between where 340B funds are spent and where they are actually needed as just 29% are located in ZIP codes below the state median income level. Rather than prioritizing low-income New Yorkers — many of whom already face pharmacy closures — many large hospital systems have instead leveraged the program’s financial incentives to consolidate a market already starved of competition. From 2016 to 2022, 75% of organizations acquired by major hospital systems were 340B facilities, allowing hospitals to generate profits from the program while not doing their fair share.
The costs of this consolidation are telling. From 2014 to 2022, 340B hospitals saw their assets rise by 38%, yet charity care – the same metric used to justify these discounts – fell by 29%. Fast forward to today, and you will find that 85% of these hospitals provide charity care at ratesthe national average. As a result, government health plans in New York have bled $89 million annually in recent years. And when it comes to cancer care, patients are paying even more. A detailed study by the American Cancer Society concluded “the financial incentives associated with 340B directly impact what a cancer patient pays for their care – the higher the cost of the drug used, the greater the amount cancer patients pay in cost sharing.”
Meanwhile, as 340B facilities continue concentrating in large urban centers, healthcare for low-income patients is pushed into higher-cost hospital settings – worsening access for patients in pharmacy deserts as well. Lastly, because of a lack of reporting requirements, it is nearly impossible to track exactly how much a hospital saves through 340B or, more importantly, whether those savings are actually being passed down to lower a patient’s out-of-pocket costs.
But the status quo does not have to dictate how we serve the most overlooked New Yorkers, nor does the potentially devastating budget language from the State Senate. To that end, for a viable path forward the Senate should focus on legislation to increase accountability around 340B funds and mandate transparency to ensure contract pharmacy arrangements benefit the local community. We need clear data to ensure that these discounts aren’t just padding hospital profits or funding the next big merger, but are instead being reinvested into better, more affordable care for patients.
The 340B program was meant to expand access to affordable care – not fuel opacity and hospital consolidation. Albany should reject the Senate’s flawed budget proposal, demand accountability from large hospital networks, and fight for reforms that put low-income communities back at the center of 340B’s mission. Marcia K. Horn is president and CEO of the International Cancer Advocacy Network, a 501 non-profit that helps late-stage cancer patients find clinical trials and second opinions.
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