NYT exposes hospitals, middlemen make millions off a hospital markup program

A ground-breaking New York Times investigation reveals how a for-profit federal contractor helps hospitals abuse the 340B program to charge huge markups on medicines. 340B has become a tool for profit, benefiting large hospital systems and private corporations far more than the patients it was designed to serve. Here is what the New York Times uncovered:

340B hospital markups drive billions in profit for hospitals, middlemen.

Virginia King, a cancer patient from Santa Fe, NM, received a cancer medicine whose price was drastically marked up by the hospital. The hospital paid only $2,700 for the drug through the 340B program yet billed her insurance $22,700.

"She had unknowingly sought care from a hospital that participates in a federal program allowing it to buy drugs at a steep discount and charge patients and insurers a higher amount, keeping the difference."

The hospital didn't stop there. They sent Virginia to debt collection for an additional $2,500 - "more than half my take-home salary for a month" she told the Times.

340B abuse is a hidden tax on employers, patients and taxpayers.

340B, which began as a small program to help safety-net providers expand care for needy patients, has seen explosive growth with little evidence of patient benefit.

"Now, more than half of nonprofit hospitals in the United States take part. While some providers say it has helped keep their doors open, others - especially large nonprofit health systems - have been accused of maximizing payouts and swallowing the profits."

"The program's escalation has driven up health care costs for employers, patients and taxpayers, studies show."

Loopholes to maximize profits.

Apexus, the for-profit company chosen by the federal government to help administer the 340B program, "has worked behind the scenes to supercharge the program." More medicines to mark up means more profit for hospitals, middlemen --such as Apexus-- and other actors taking advantage of the program.

"...Apexus is allowed to collect a fee for almost every drug sold under the program, giving the company an incentive to help hospitals and clinics capture as many prescriptions as possible …"

"The numbers and the growth were staggering…We all bear the cost."

No guardrails or oversight gives bad actors free rein.

There is a severe lack of transparency and oversight of the 340B program, with the New York Times noting that there are few rules to ensure patients are benefitting from the program. "Although the money is supposed to encourage care for impoverished patients, there are few rules to enforce that.

"Patients rarely know they are part of this system. Their prescriptions can be counted as 340B when they get outpatient treatment at a hospital or clinic that qualifies for the program, regardless of the patients' own income or insurance status. The provider can continue to make money off the patients' future outpatient prescriptions, even if they get them somewhere else."

This investigation from the New York Times is yet one more clear piece of evidence that the 340B Hospital Markup Program is deeply broken and in desperate need of reform.

Policymakers need to put forth comprehensive reforms to hold 340B hospitals and middlemen accountable for their greedy behavior.

Public link

Please use the above public link if you want to share this noodl on another website.