AIR340B to FTC: Outsized role of PBMs in safety-net program harms vulnerable patients
For vulnerable patients across America, getting the 340B Drug Pricing Program right could be the difference between receiving lifesaving care or not. If it was working how Congress intended when it was created three decades ago, the 340B program would help vulnerable communities access their medications. Amid skyrocketing inflation rates that have left Americans all over the country pinching pennies, now is the time to step up to support these communities and their patients.
Unfortunately, the 340B program has veered critically off course. Large, wealthy hospitals and for-profit chain pharmacies have prioritized profits over patients as a lack of transparency, oversight, and accountability has enabled these institutions to take advantage of 340B to boost their bottom line.
When considering how these bad actors have abused 340B, we cannot disregard the role of middlemen, like pharmacy benefit managers (PBMs).
That’s why the Alliance for Integrity and Reform of 340B (AIR340B) joined fellow industry leaders in submitting a comment letter to the Federal Trade Commission on the outsized role of PBMs.
It is clear that PBM-owned, for-profit pharmacies — like those operated by or affiliated with CVS Health, Express Scripts and OptumRx — continue to increase their participation in 340B despite clear indicators that patients are not benefiting from their expansion into the program.
For-profit pharmacy expansion in 340B has opened the door for PBMs to profit off the program.
Since 2010, the Health Resources and Service Administration (HRSA) has allowed covered entities to have an unlimited number of “contract pharmacy arrangements” under 340B. Since then, we have seen exponential growth of contract pharmacy arrangements, including with for-profit, PBM-owned specialty pharmacies. In just four years, there has been a 1,006% increase in contract pharmacy arrangements between 340B entities and specialty pharmacies.
Its past time for the 340B program to prioritize patients.
Exponential growth of the program has lent itself to 340B becoming a cash cow for covered entities and their contract pharmacies, generating an estimated $13 billion in gross profits from 340B-purchased retail medicines in 2020 alone. It is estimated that over half of these profits are concentrated within four corporations — Walgreens, Walmart, Accredo, and CVS Health. Alarmingly, two of these companies are associated with a PBM, demonstrating the substantial profit PBMs can generate through 340B.
What’s more? Despite evidence that DSH hospitals and contract pharmacies are profiting, the only data that exists on whether patients see benefits from 340B suggests that in most cases, they do not.
In short, the 340B program is not fulfilling its mission of supporting vulnerable communities despite its rapid growth. This year, the 340B program is celebrating its 30th anniversary. One thing is clear — vulnerable communities cannot wait another 30 years for transparency, oversight and accountability to be prioritized.
Reevaluating how the program has grown is crucial for its future — including the role PBMs have played in that growth. PBMs are leeching off the 340B program, leaving patients behind. Without fixes, the 340B program will continue to benefit for-profit pharmacies and PBMs instead of patients who need it most.