Biden's 340B Drug Pricing Reform Aims to Stop Hospital Profiteering
The 340B drug pricing program, designed to lower costs for vulnerable patients, has fallen short due to lack of oversight and hospital profiteering. A new proposal aims to rectify this by shifting to retroactive rebates and improving auditing.
The 340B Rebate Model Pilot Program, initiated by the Biden Administration, targets Section 340B of the Public Health Service Act. It initially focuses on drugs listed in the CMS Medicare Drug Price Negotiation Selected Drug List. The program aims to prevent hospitals, known as covered entities, from double-dipping - charging full prices to patients for discounted drugs and pocketing the difference.
The Trump Administration's proposal seeks to fulfill the original mission of the 340B program: lowering drug costs without price controls or patent infringements. It introduces a 340B Rebate Model Pilot Program to eliminate abuse and improve accountability. The proposal parallels successful federal drug pricing programs, such as the Medicaid Drug Rebate Program and the Department of Veterans Affairs Federal Supply Schedule.
The proposed reform could bring drug price relief to everyday Americans without using price controls or violating patent rights. To maximize consumer benefits, the program should eventually cover all drugs within the 340B program, reducing complexity and ensuring that savings reach patients.
