U.S. Senator Bill Cassidy, chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, addressed the committee during a hearing on the 340B Drug Pricing Program and its effects on American patients. Cassidy has been examining how organizations use revenue from the 340B program to benefit low-income patients since 2023.
The 340B program was created by Congress to help make health care more affordable for low-income and uninsured individuals by allowing certain hospitals and community health centers to buy prescription drugs at discounted rates.
Cassidy stated, “It’s a well-intentioned program, but people judge you by your actions, not your intentions.” He raised concerns about the rapid expansion of the program with limited oversight and questioned whether the financial benefits are reaching low-income patients as intended.
He pointed out that as participation in the 340B program has grown, so have overall health care costs. Cassidy referenced findings from the Congressional Budget Office indicating that this growth has led to higher expenses for both patients and taxpayers. He also cited a study from the National Pharmaceutical Council which estimated that increased use of 340B contributed to a $4.5 billion rise in premiums for employer-sponsored insurance between 2017 and 2023.
Cassidy said, “Let’s not lose sight of the goal here – we’re trying to make health care more affordable. But 340B is making employer-sponsored insurance, which pays for the health care for 150 million people, less affordable.”
He criticized incentives within the program that encourage providers to prescribe more expensive drugs and drive consolidation among health care systems. According to Cassidy’s investigation begun last year, much of the revenue generated through 340B goes to for-profit intermediaries rather than directly benefiting patients.
“It appears the significant growth of the 340B program has become a means for some to pad bottom lines, but with little focus on affordability for the family, or for the employer who is helping to pay for their insurance,” he said.
Cassidy called attention to recommendations made by the Government Accountability Office (GAO) since 2011 aimed at improving oversight of the program. Of those recommendations, only five out of twenty have been implemented so far.
He outlined proposed reforms designed to increase transparency in how entities use funds from 340B and ensure direct patient benefits. These proposals include establishing clear guidelines and requiring reporting on revenue usage as well as examining fees charged by middlemen.
“340B should be about making drugs more affordable, not a line item on an investor call,” Cassidy stated.
He acknowledged resistance from groups benefiting under current rules but argued that reform could support both underserved providers and patients without harming either group. He shared an example where compliance costs forced a small community health center out of participation due to high fees from intermediaries.
“We have a responsibility to fix the broken status quo. 340B reforms are crucial to implementing a pro-patient, pro-family agenda that lowers the cost of health insurance and drugs for all Americans and American businesses,” he concluded before yielding time to Senator Sanders.
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