New Report Shows 340B Profits Often Exceed Charity Care Spending for Disproportionate Share Hospitals

Analysis questions if 340B profits are reaching vulnerable patients

WASHINGTON, March 28, 2024 /PRNewswire/ -- The Alliance for Integrity and Reform of 340B (AIR340B) today released a new report, DSH Hospitals' 340B Profit Often Exceeds Charity Care Spending, which analyzed the latest data on hospital charity care and found that 85% of disproportionate share hospitals (DSH) earn more in 340B profit than they spend on charity care.

Under the 340B program, certain entities that treat large numbers of low-income or uninsured patients, such as DSH hospitals, can purchase medications at significantly discounted prices. The 340B program was designed for these covered entities to use 340B discounts to lower patient out-of-pocket drug costs or invest in free or reduced-cost charity care for vulnerable patients. Critically, DSH hospitals often receive reimbursement from patients and their insurers that exceeds the discounted 340B price, with hospitals keeping this "340B profit."

This new report highlights that despite explosive growth in the number of 340B covered entities, amount of 340B drug purchases, and 340B profits, 340B hospitals continue to provide low levels of charity care compared to the profits they generate.

The report calls out the following key data:

• In 2022 alone, DSH hospitals earned $44 billion in 340B profit but spent only $18 billion – just 42% of those 340B profits – on charity care.
• In 18 states and Washington, DC, every DSH hospital earns more in 340B profit than it spends on charity care.
• In 47 states and Washington, DC, more than half of DSH hospitals earn more in 340B profit than they spend on charity care.

These findings suggest that DSH hospitals are primarily using 340B profit for other purposes. As the 340B program continues to grow and the lack of transparency and oversight in the program becomes more pronounced, this new data calls into question whether hospitals are using their 340B profits to fulfill the original goal of the program – serving patients in need.

The Alliance for Integrity and Reform of 340B (AIR340B) is a coalition of patient advocacy groups, clinical care providers, and biopharmaceutical innovators dedicated to reforming and strengthening the 340B program to ensure it directly supports access to outpatient prescription medicines for uninsured indigent patients. 

SOURCE Alliance for Integrity and Reform of 340B (AIR340B)