Study shows certain Illinois hospitals provide below average levels of charity care

(The Center Square) – A new study shows that 340B hospitals in Illinois and around the country are abusing a federal drug pricing program.

The 340B Drug Pricing Program was created in 1992 to help struggling, uninsured or otherwise vulnerable patients access more affordable medications. Under the program, drug manufacturers provide discounted medications to qualifying hospitals and clinics.

The group Alliance for Integrity and Reform 340B found that some hospitals are keeping the discounts for their own profit, and today’s 340B program has morphed into a massive profit generator for pharmacy chains, hospitals and middlemen like pharmacy benefit managers.

AIR340B spokesperson Nicole Longo said there needs to be changes to the program.

“We think that if the hospitals are buying medicine at a discount, then low-income patients should have access as well to that discount, and finally, there needs to be clearer rules about hospitals and how they qualify for the program,” said Longo.

AIR340B found that hospitals made 87% of purchases under 340B in 2022, but they are not required to report their 340B profits or how the revenue is used to lower costs for patients. They also found that Illinois 340B hospitals earn in excess of 2.5 times more in 340B profits than is spent on charity care, while 69% of Illinois 340B hospitals provide below-average levels of charity care.

The report shows that only 37% of Illinois hospitals reviewed are compliant with drug price transparency.

They also found that 340B hospitals in Illinois have 4,287 contracts with 340B pharmacies, 19% with out-of-state pharmacies.

In May, U.S. House Energy and Commerce Committee Chair Cathy McMorris Rodgers, R-Washington, and Subcommittee on Oversight and Investigations Chair Morgan Griffith, R-Virginia, announced a subcommittee hearing titled “Oversight of 340B Drug Pricing Program.”

"It’s important that we preserve patients’ access to important and live-saving drugs. We must explore how the 340B program is working to ensure it aligns with how the program was intended to function,” said Chairs Rodgers and Griffith.