Submitted by former State Senator and Senate President Pro Tem Terry Burton

“The program has been hijacked by large for-profit hospital systems that are using the program to fill their pockets without providing any additional charity care,” former State Senator Burton writes.

I would argue that most politicians have good intentions, but good intentions don’t always make for good policy. Many programs in our country that were created with good intentions have led to a culture that takes advantage of the very people they were designed to help.

One of these good intentioned programs is Medicaid’s 340B drug pricing program which is currently failing at its goals and failing the American people and the people of Mississippi.

The 340B program was established to help reduce the price of healthcare for low-income and uninsured patients. This would be achieved by providing drugs to rural hospitals and community health centers at a reduced cost, which would ideally provide these institutions with the financial freedom to provide charity care. A worthy cause indeed!

However, the program has been hijacked by large for-profit hospital systems that are using the program to fill their pockets without providing any additional charity care. In fact, 340B institutions provide less charity care on average than non-340B entities.

I cannot stomach the fact that these large entities are profiting off the neglect of the poor. Beyond my faith, my values as a conservative American are staunchly opposed to the massive growth of the program. The 340B program has inflated from $6.9 billion in 2012 to $38 billion in 2020 without any noticeable rise in charity care.

Since 1992, the program has grown five times faster than the growth rate of the overall drug market and has become the second largest federal drug program. More than two out of every five hospitals in the United States participate in 340B even though it was intended to be a small program with only 45 hospitals participating in 1992. And why wouldn’t these hospitals want to participate?! A 340B hospital or clinic may claim steep discounts on outpatient medicines dispensed to all patients, whether insured or uninsured.

In 2010, Health Resources and Services Administration’s contract pharmacy guidance allowed all 340B entities to have an unlimited number of contract pharmacy arrangements. This allowed for-profit corporations to expand the 340B program with no clear benefit to patients. Currently, hospitals have created expansive networks of contract pharmacies, where they can obtain the 340B discounts and share in the profits but do not have to share any savings with patients.

To make matters worse, because drug manufacturers have smaller profit margins on 340B drugs, drug prices are rising for everyone due to 340B and the greed of large hospitals. This program simply does not align with my conservative or Christian values I hold dear to my heart.

While 340B was created for good, the program has suffered from poor legislative drafting, overly broad administrative guidance and poor Congressional oversight and has lost its intended focus. I urge our Senators to keep fighting for Mississippians by reforming this failed government initiative.

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Submitted by former State Senator and Senate President Pro Tem Terry Burton