Jen Nunez
Like many in my profession, I became a nurse out of a deep desire to help people — especially those in underserved communities who struggle to access quality, affordable care. In pursuing this mission, I have made it a priority to stay informed about programs designed to bridge these health care gaps.
One such program is the federal 340B hospital markup program, which was intended to help nonprofit hospitals provide affordable care to low-income and rural patients. Unfortunately, the reality of how the program is being used today tells a very different story.
Rather than serving as a lifeline for vulnerable patients, 340B has become a profit-generating machine for large hospital systems, many of which are exploiting the program for financial gain. These institutions purchase prescription drugs at deep discounts, as the program allows, but then turn around and charge patients and insurers exorbitant prices for those very same medications. The result? Soaring medical bills for patients who were supposed to be protected by this program.
I have seen firsthand how this system harms the very people it was meant to help. I have watched patients struggle under crushing medical debt, seeking assistance from hospitals that claim to be safety nets, only to be met with indifference. A recent New York Times investigation underscored this issue, revealing that, in some cases, patients would actually save money by seeking care at non-340B hospitals rather than those profiting from the program.
Beyond inflating drug costs, 340B is also fueling consolidation in the health care sector, driving up costs across the board. Large hospital systems use the program’s incentives to buy up smaller, non-340B clinics and independent physician practices. This expansion increases their revenue streams while limiting patient options, reducing competition and further entrenching their market power. The end result is fewer choices for patients and higher costs across the health care system.
This is not what Congress intended when it created the 340B program, and it’s time for lawmakers to step in and ensure hospitals are held accountable.
Right now, there is virtually no oversight, transparency or accountability governing how 340B hospitals use the revenue they generate from the program. That is beginning to change as states take it upon themselves to investigate how hospitals are exploiting the system.
In Minnesota, a recent state Department of Health report found that 340B hospitals marked-up prescription drug prices by at least $630 million in 2023 alone. In North Carolina, the State Treasurer discovered that 340B hospitals charged state employees an average of 5.4 times what they paid for cancer medications, pocketing an astonishing $13,500 per claim.
New Hampshire is no exception to these abuses. Here in the Granite State, 340B hospitals generate 6.8 times more in program profits than they spend on charity care. That means these hospitals are making massive sums of money off a program that was supposed to help our state’s most vulnerable patients, while those patients continue to struggle with the high cost of care.
Oddly, a new bill in the state legislature (SB 253) would entrench hospital abuses of the 340B markup program by mandating new rules around the program. This bill takes us in the wrong direction. The program is badly in need of federal reform first and foremost.
Senator Maggie Hassan has an opportunity to be a champion for low-income patients in New Hampshire by pushing for real reform in Washington. She has already built a reputation as a bipartisan reformer, particularly when it comes to ensuring greater transparency in hospital billing practices. She now has the chance to lead the charge in fixing 340B, ensuring it fulfills its original mission.
There are clear steps Congress can take to bring much-needed reform to the 340B program. Meaningful legislative action should focus on three key principles. For example, hospitals that benefit from 340B should be required to pass savings directly to the patients who need them most. The program should be reserved for hospitals that are demonstrably committed to serving low-income and rural communities, rather than those using it as a profit center. Finally, Congress must implement stronger reporting requirements to track how hospitals use 340B revenue, ensuring it is directed toward patient care rather than hospital expansion and executive bonuses.
The original intent of 340B was to help patients, not to enrich large hospital systems at their expense. Without urgent reform, hospitals will continue to exploit the program, and Granite Staters will continue to pay the price. It’s time for Congress to act and restore the integrity of 340B for the patients who need it most.
Jennifer Nunez is the former director of emergency at LRGHealthcare.Â
