Rhode Island’s 340B Bill Misses the Mark on Accountability - Dr. Peter Margolis

Rhode Island’s 340B Bill Misses the Mark on Accountability - Dr. Peter Margolis

 

As a gastroenterologist running an independent community-based practice in Rhode Island, I see every day what it takes to deliver high-quality, cost-effective, patient-centered healthcare. My focus is ensuring my patients have easy access to consistent and affordable treatment options for gastrointestinal conditions. But well-intended federal drug programs built to help doctors serve vulnerable populations are being manipulated by hospitals in ways that make it harder for us to reach patients in our communities.

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The 340B Drug Pricing Program was created to allow hospitals, community health centers, and small clinics to purchase deeply discounted medications. The program was intended to further stretch scarce federal resources and improve access to medicines for low-income, underinsured, and uninsured patients. However, some large hospital systems, with guidance from large pharmacy corporations and Pharmacy Benefit Managers (PBMs), are distorting the program to become profit centers for their already massive bottom lines.

 

Large hospital systems now routinely buy markedly discounted drugs through the 340B program and bill insurers at full or higher prices, and then pocket the difference. Studies have shown that these discounts are rarely passed on to patients or reinvested into charity care as is the intent of the 340B program. Independent studies have found that in Rhode Island, 340B hospitals spend just 0.8% of their operating costs on charity care – that’s 68% below the already-low national average. Instead of helping patients afford the cost of expensive medications, the program has become a financial engine for multi-billion-dollar institutions.

 

For patients with chronic conditions like Crohn’s disease or ulcerative colitis, infusion services are the cornerstone of an effective treatment program. Consistent access to infusion medication is how physicians prevent flare-ups and how my patients manage their conditions, so that they can improve the quality of their lives. But infusion services can be incredibly expensive for debilitating diseases, such as inflammatory bowel diseases, both for those offering the services and the patients receiving them.

 

Large hospitals have access to 340B pricing on expensive medications, like infusions, so they can purchase the medications at a much lower cost than an independent provider – which they then mark up for significant profits. A study in the New England Journal of Medicine found that large hospitals profit more than $650 more per infusion than practices like mine because of the discounts offered by the 340B program.

 

This profit-centered dynamic also drives hospital consolidation. Hospitals look to “capture” patients at as many sites as possible to maximize profits, forcing some small practices to choose between closure and being “rolled up” into larger systems that can profit from 340B drug pricing. This consolidation reduces patient access to convenient treatment options and leads to higher costs for patients.  

 

Ultimately, the 340B program forces independent physicians to send patients elsewhere for some treatments, in turn contributing to the slow collapse of independent care.

 

This paradigm often requires patients receiving stable and effective therapy to switch to a new or different “biosimilar” medication for non-medical reasons. This forced non-medical switching leads to delays in “timed” therapies, resulting in increased flares of chronic illness.

 

When these options disappear, patients lose more than just choice – they lose a trusted relationship. Independent care offers something large hospital systems can’t: accessible, personal, community-based treatment.

 

The original intent of the 340B program is laudable and worth both defending and preserving. Currently, Rhode Island lawmakers are considering legislation that would lock in the existing problems with 340B program abuses.

 

Pending 340B legislation is intended to reduce barriers to care for our patients – a well-intended and shared goal. But I am deeply concerned that the bill, in its current state, will reduce transparency and accountability in the program and allow large hospital systems to continue prioritizing profits over patients.

 

The pending legislation would also make it harder to track the money flowing through the 340B program by reducing transparency and audit requirements and does not include provisions that protect community-based doctors and our patients. This current bill falls short in addressing the transparency and accountability that will ensure the 340B program works as intended.

 

340B is an essential program for many Americans struggling with the cost of health care, but hospitals are using it to generate profits instead of providing care to our patients in need. As a physician, I am fearful of the ways in which state 340B legislation in its current form could exacerbate costs to patients and threaten the viability of community-based providers.

 

Rhode Island lawmakers should rethink their approach to 340B. Reform must be rooted in transparency, accountability, and real benefit to patients – not policies that entrench a broken, opaque, profit-first system for large pharmacy corporations and large healthcare systems.

 

Dr. Peter Margolis is a gastroenterologist with University Gastroenterology in Providence, RI