Congressman Brett Guthrie, who chairs the House Committee on Energy and Commerce, responded to a new report from the Congressional Budget Office (CBO) that examines the impact of the 340B Drug Pricing Program. The report, released on September 9th, found that the program encourages practices leading to higher federal spending and increased costs for taxpayers.
According to Guthrie, “Today, the Congressional Budget Office has further validated my long-standing concerns that the 340B program—while an important lifeline to many of our safety net providers—has the ability to be abused and drive-up overall health care costs for Americans. I’m committed to conducting the necessary work to making sure that the program works for both our safety net providers and patients.”
The CBO’s analysis highlights several trends from 2010 to 2021. Spending on drugs purchased through the 340B program grew at an average rate of 19 percent annually during this period, surpassing overall market growth in prescription drug spending. The report also notes that clinicians are incentivized by the program to prescribe more medications and select higher-cost drugs, which contributes to increased federal expenditures. Additionally, manufacturer rebates—which typically help lower patient costs—are reduced as a result of these incentives.
The analysis further points out that covered entities profit from participation in the 340B program. This profitability has been linked with greater vertical consolidation among healthcare providers, contributing to higher overall health care costs.
The Affordable Care Act expanded eligibility for participation in the 340B program by allowing more hospitals and federal grantees access. This expansion resulted in greater spending within the program and was identified as a factor increasing patient costs and driving additional provider consolidation.
