Show-Me State Times

U.S. taxpayer watchdog group Citizens Against Government Waste (CAGW) has raised concerns about the 340B Drug Pricing Program, alleging that hospitals are exploiting the program to purchase medications at a discount while charging patients full price for profit. CAGW shared these findings in a December 6 post on X.

According to North Carolina State Treasurer Dale Folwell, a report released in May revealed that hospitals were billing state employees over five times their cost. The 340B Program, initially designed to assist low-income and rural communities, is reportedly being used by hospitals to boost profits. Researchers found that hospitals prioritize higher-paying patients instead of reinvesting savings into vulnerable communities. Folwell is urging lawmakers to reform the program by introducing transparency measures and requiring hospitals to share their discounts with state employees, teachers, and taxpayers.

Richmond Community Hospital, owned by Bon Secours Mercy Health and located in a predominantly Black neighborhood in Richmond, Virginia, has faced criticism for operating with minimal services while generating some of the highest profit margins among hospitals in Virginia. According to the New York Times, the hospital lacks essential resources such as an intensive care unit and reliable diagnostic equipment. Critics say Bon Secours has capitalized on a federal prescription drug program intended for impoverished areas by purchasing drugs at steep discounts and charging insurers full price. They allege that profits from Richmond Community have been diverted to wealthier areas, investing in suburban facilities while leaving the struggling hospital under-resourced.

Citizens Against Government Waste | X

The 340B Drug Pricing Program was established in 1992 to support uninsured or low-income patients by enabling covered entities like hospitals or healthcare organizations to purchase drugs for eligible patients at lower costs and pass those savings on to the patients. Since its inception, there has been little oversight added to the program, leading to allegations that hospitals and healthcare institutions are pocketing savings instead of lowering costs for patients.

Citizens Against Government Waste is a nonprofit, nonpartisan watchdog organization focused on mismanagement and waste within government operations. It was founded in 1984 by J. Peter Grace and Jack Anderson. Its current president is Tom Schatz.