Old North News

North Carolina State Treasurer Dale Folwell said a new report he released shows how "hospitals are getting rich on the backs of cancer patients, state employees and taxpayers" due to their abuse of the 340B program. 

“Some things are worth getting mad about. This is a program that is meant to help North Carolina families who can’t afford prescription drugs,” Folwell said. “Now we know that hospitals are getting rich on the backs of cancer patients, state employees and taxpayers.”

The state treasurer published a report revealing that 340B hospitals charged state employees an average markup of 5.4 times their discounted acquisition costs for oncology drugs.

The 340B drug pricing program was created in 1992 to support uninsured or low income patients by enabling 340B covered entities like hospitals or health care organizations to purchase drugs for eligible patients at lower costs, passing on those savings to the patients. Since inception, there has been little oversight added to the program, leading to hospitals and health care institutions pocketing the savings instead of lowering costs for patients

The 340B ACCESS Act was proposed to address these issue, and would add new requirements for transparency and eligibility to protect 340B patients. The legislation provides a clear definition of which patients are 340B eligible as well as a detailed list of requirements for hospitals to be eligible for participating in the 340B program. 

When administering cancer drugs to teachers and state employees, North Carolina 340B hospitals charged patients 5.4 times their discounted acquisition costs, resulting in an average price markup that was 84.8% higher than that of hospitals not participating in the program. Rather than focusing on vulnerable communities, these 340B hospitals sought greater profits by expanding into wealthier neighborhoods with higher rates of health insurance, where patients were able to pay more for prescription medications, according to the report. 

“As a purchaser of health insurance for almost 750,000 people, the North Carolina State Health Plan has a fiduciary obligation to state workers and state taxpayers to ensure it is spending dollars wisely," said Christopher Whaley, one of the researchers for the report. "This study reveals the high and variable prices charged to cancer patients by North Carolina hospitals. That's a cost that comes directly out of worker wages and taxpayer dollars."

Folwell is urging state and federal lawmakers to reform the 340B Drug Pricing Program and to offer price relief for state employees and taxpayers at hospitals.