No, health costs aren’t rising because of drug discount programs



Why would a group that claims to hate government waste want to tear down a small federal health-care program that saves taxpayers money? We should first start by following the money.

In The Hill, the group Citizens Against Government Waste tore into the tiny 340B drug discount program, claiming it’s a reason why health care costs are rising. That’s absurd. 340B saves hospitals that serve low-income and rural communities (plus other smaller safety-net health-care providers) around $6 billion a year on medicine.

Hospitals use the savings from the program to provide free or nominally-priced drugs to the large number of poor, uninsured, and under-insured patients they serve. The lower costs of medicine mean that local taxpayers that support these hospitals and clinics don’t get hit with property tax hikes. While the discounts amount to only 1 percent of the total U.S. drug market, they provide a lifeline to communities big and small.

The 340B program helps real people every day. Take Jennifer Gallagher of Pueblo, Colo. She received an artificial heart valve at Pueblo’s Parkview Medical Center in 2013 and needs to take the blood thinner Coumadin for life. Patients on Coumadin need close medical supervision.

Gallagher gets it at a discount from Parkview’s retail pharmacy thanks to the hospital’s participation in 340B. Parkview saves around $5 million a year on medicine through 340B. Some of that money goes toward the anticoagulation clinic Gallagher visits every week. Some goes to Parkview’s cardiovascular center where she goes to exercise to stay healthy. Some pays for the medication discharge counseling Gallagher and other Parkview patients get. Some goes toward the tens of millions of dollars Parkview provides in uncompensated care every year.

This is just one of many 340B success stories that my association, 340B Health, has compiled and made available on our website. Parkview and all other 340B hospitals use the money they save on medicine to stretch their other scarce federal dollars, so they can serve more patients like Jennifer Gallagher and provide them with more comprehensive services.

Why on earth would a group named Citizens Against Government Waste want to stop to that?

Perhaps it has to do with the money this so-called good government group takes from the drug industry. While CAGW is not exactly transparent when it comes to its corporate donors, public records show it has received tens of thousands of dollars from Pharmaceutical Research and Manufacturers of America over the past several years. How much more CAGW might be getting from individual drug manufacturers is unknown.

CAGW has a web page with a long list of businesses including about a dozen drug companies. On that page it encourages the businesses’ employees to ask about their employer’s matching contribution programs, which would allow them to double or even triple their contribution to CAGW.

Others have questioned CAGW’s impartiality. “CAGW has provided a wide array of services to help corporate groups with Washington lobbying campaigns,” investigative journalist Bill Adair wrote about the group when he was Washington bureau chief for the Tampa Bay Times. The founder of the Pulitzer Prize-winning website PolitiFact, he’s currently Knight Professor of the Practice of Journalism and Public Policy at Duke University. “[CAGW] has written letters to Congress, organized postcard campaigns from its members and written news releases and newsletter articles.”

CAGW’s opinion piece for The Hill recites drug industry talking points against 340B hospitals almost verbatim. It likewise repeats drug industry demands for 340B “reforms” that would slash the number of hospitals eligible for drug discounts, slash the number of prescriptions on which discounts can be claimed, and impose extremely burdensome new regulatory requirements on hospitals to get them to quit 340B.

Make no mistake: This has nothing to do with reducing the cost of healthcare and everything to do with helping the drug industry goose its profits. CAGW and any legitimate individual who has contributed to this organization should be ashamed.

CAGW says hospitals in the 340B program need to be more transparent. We say people who live in glass houses shouldn’t throw stones. The next time you read an article or hear an interview in which CAGW throws an important and vital program like 340B under the bus, ask yourself who has been paying CAGW’s bills.

Ted Slafsky is president and chief executive officer of 340B Health, a non-profit group which represents more than 1,300 hospitals in the 340B drug discount program.