Astroturf Campaign Attacks Discount Drug Program for Poor

Each year, thousands of patients at medical facilities that serve the poor are given free or discounted medications through an obscure federal program that pharmaceutical companies are required to participate in as a condition of having their drugs covered by Medicare. Passed by Congress in 1992, the program, known as 340B, has come under attack from the pharmaceutical industry for being too generous to the patients, medical facilities, and pharmacies that benefit from it.

Companies including Eli Lilly, AstraZeneca, and Sanofi scaled back their participation in the program last year by halting drug sales to 340B-eligible hospitals and medical facilities that contract with third-party pharmacies at discounted rates as required by the 1992 law. More drug companies have since decided to stop participating, including Novo Nordisk and Novartis.

The companies argue that some contracting pharmacies are charging too much for the drugs, which they receive at a discount, and then pocketing the savings or splitting the profit with the medical facilities that refer patients to them. Approximately one-third of the hospitals that participate in the 340B program contract with pharmacies to distribute the drugs, according to a 2018 study from the Government Accountability Office. Read Full Article »