Georgians continue to struggle with managing health challenges and rising health care costs. As a legislator, I have witnessed this firsthand. These challenges are also compounded for our underserved and under sourced communities, with chronic illnesses such as heart disease, stroke and obesity disproportionately impacting Georgia’s Black residents.
My colleagues in the state Legislature are right to look for solutions to address health care challenges and help improve the lives of the individuals, caregivers and families we represent. However, one proposal lawmakers are considering could have the opposite effect. By accelerating the growth of a federal program known as 340B, the Georgia General Assembly would enable large hospitals and for-profit corporations to continue profiting from a program meant to serve low-income Georgia patients without addressing patient out-of-pocket costs.
The federal government created the 340B program with the intention of improving access to treatments for low-income and uninsured communities. Through 340B, qualifying hospitals and clinics serving these patients can purchase deeply discounted medicines directly from manufacturers with the expectation that they use the savings to help patients access medications or invest in charity care.
However, what was once a well-intentioned program has veered significantly off course. In recent years, many large hospitals participating in 340B and other corporations have turned a program meant to help the nation’s most underserved into a profit-maximizing scheme to improve their own bottom lines. The program has ballooned in size, with discounted medication purchases under 340B reaching over $66 billion in 2023, 23% more than in 2022. Yet, the program lacks necessary transparency and oversight to ensure that discounted purchases are actually reaching patients in need.
The significant growth of the program is due, in part, to large corporations, including hospitals, chain pharmacies and health industry middlemen known as pharmacy benefit managers, exploiting loopholes within the program and continuous profiting at the expense of underserved patients. Many large hospitals that participate in 340B are marking up the cost of medicines instead of using the discounts received to help patients access care. Medicine price markups are almost seven times higher at 340B hospitals than at independent clinics. For every $10 the most profitable 340B hospitals collect in profit, just $1 is invested in charity care.
In addition to egregious behavior from hospitals participating in 340B, they can also contract with an unlimited number of pharmacies, many of which are owned by the nation’s largest PBMs. As a result, PBMs and 340B contract pharmacies are also raking in massive profits from marked up 340B medicines.
For individuals living with chronic diseases or other medical issues, the impact has been devastating. With no guardrails or oversight to ensure discounts are reaching 340B patients, we cannot confirm that patients are benefiting from the program — and research continues to prove they are not. In Georgia, 32% of hospitals provide below-average levels of charity care. Research shows participation in the 340B program does not improve health outcomes for patients. An analysis found that two 340B hospitals in Georgia charged patients five times the amount for care compared to how much it costs the hospital to provide the care.
Abuse of the 340B program for profit undermines the integrity of the program and worsens disparities in care and that disproportionately impact Black and marginalized communities. Just two states away, a groundbreaking investigation found that in Virginia, Bon Secours Mercy Health, a prominent nonprofit health system, acquired Richmond Community Hospital, a community hospital in a predominantly Black community. Bon Secours abused its ownership of Richmond Community Hospital, cutting critical services, including the intensive care unit, while generating over $100 million in profit from the program. Richmond’s former Mayor Levar Stoney even called for a federal investigation following the investigation, noting it “is immoral to profit off the backs of Black and Brown residents under the guise of health care.”
It is clear 340B is broken. And that’s exactly why the legislation introduced in the Georgia Legislature would have a disastrous impact on our state. House Bill 139 would facilitate further abuse of the 340B program by facilitating the program’s unchecked growth.
We cannot let health disparities worsen in Georgia. I urge my fellow lawmakers to oppose any efforts to let the 340B program expand with no transparency or oversight. If House Bill 139 goes into effect, hospitals and for-profit companies will continue to profit from the marginalized patients 340B was created to help.
Credit: Photo contributed by the candidate
Credit: Photo contributed by the candidate
State Rep. Kim Schofield serves the citizens of House District 63, which includes areas of southeast Atlanta, East Point, College Park, Forest, Hapeville, South Fulton and Union City.
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