Dec 31, 2020

Part IV: Escalating Assault on 340B Program for Providers Serving America’s Most Vulnerable

Before the COVID-19 pandemic, more than 58 million Americans struggled to afford their prescription drugs. Now, the ongoing economic impact of the public health crisis continues to leave millions of American workers, families and seniors struggling just to stay afloat. Meanwhile, prescription drug prices continue to rise, due to continued bad behavior from Big Pharma – making it even harder for American patients to afford their medications.

From engaging in price hikes during a pandemic and angling to price-gouge Americans on COVID-19 treatments and vaccines, while receiving billions of dollars from taxpayers, to escalating its assault on the critical 340B program and purposefully blocking competition and engaging in kick-back schemes, Big Pharma continues to place profits over people.

On top of this year of bad behavior, Big Pharma can be expected to maintain an annual tradition of ringing in the New Year with a fresh round of price hikes beginning on January 1. In the countdown to these New Year pandemic price hikes from Big Pharma, this blog series will outline the egregious actions of the industry over the past year, as a reminder, that policymakers in Washington must act to hold drug companies accountable.

Yesterday, we explored how Big Pharma has angled to price-gouge the American public on COVID-19 treatments taxpayers paid to develop. Today, we’re taking a look at Big Pharma’s escalating assault on the critical 340B program.


This fall, a slew of Big Pharma giants began brazenly attacking the 340B program, which supports access to care and critical health services for at-risk Americans, including those who are low-income and who live in rural areas – at the height of a public health crisis.

In December, Novo Nordisk became the latest Big Pharma giant to brazenly stop recognizing legally mandated prescription drug discounts for covered entities under the 340B program.

Novo Nordisk’s assault on the 340B program comes on the heels of similar announcements from brand name giants AstraZeneca, Eli Lilly, Sanofi and Merck. Last quarter, each of these brand name giants reported expectation-besting earnings and AstraZeneca, Eli Lilly and Sanofi made their announcements shortly after participating in summer price hikes on nearly two dozen drugs during the pandemic.

About The 340B Program

The 340B program was established by Congress to ensure health care providers serving America’s most vulnerable patients, including those with low incomes and living in rural communities, are able to acquire medications at a discount established by statute and invest the savings in care for patients and communities in need. In exchange, drug companies receive taxpayer-funded coverage for their products through the Medicaid and Medicare Part B programs.

In 2010, the Health Resources & Services Administration (HRSA), which oversees the 340B program, issued guidance explicitly stating that under HRSA’s interpretation of the statute drug companies must honor 340B discounts for covered entities purchasing medications to be dispensed to their patients through contract pharmacies.

In December 2020, HRSA again released guidance outlining its interpretation of statute that drug companies must honor 340B discounts in contract pharmacies.

Big Pharma’s Price Hikes Increase 340B Discounts

Big Pharma’s rhetoric targeting the 340B program points to rising discounts, but fails to acknowledge that the industry’s own price hikes are a key driver of larger discounts:

  • The 340B program requires an “additional discount to offset price increases greater than inflation.” (Robert King, Drugmakers getting bolder in fight over 340B drug discounts, FierceHealthcare, 8/26/20)

Meanwhile, Big Pharma’s repeated price hikes have created a crisis of prescription drug affordability. These hikes have increased the size of discounts under the 340B program through inflationary penalties that are meant to disincentivize the industry’s rampant price-gouging of medications needed by many of the nation’s most vulnerable patients.

  • Since 2014: Prescription drug prices have risen 33 percent — or 20 times faster than the rate of inflation.
  • In July 2020: Despite calls to suspend traditional mid-year price hikes while millions of Americans grappled with economic uncertainty caused by the COVID-19 crisis, Big Pharma increased prices on more than 65 brand name drugs.
  • In January 2020: Big Pharma hiked prices on more than 600 drugs by an average of 5.2 percent.
  • In July 2019: Big Pharma hiked prices on 104 drugs by an average of 13.1 percent.

And don’t forget that tomorrow Big Pharma can be counted to hike prices again (a second major round of hikes during a public health crisis) as part of an annual New Year drug company tradition.

Now, more than ever, our policymakers must hold Big Pharma accountable and lower prices for American patients. Read more on market-based solutions to hold Big Pharma accountable HERE.

CLICK HERE to read: “Dose Of Reality” Big Pharma’s Year of Bad Behavior Part I: Sticking with Price-Hiking “Business as Usual” During Pandemic.

CLICK HERE to read: “Dose Of Reality” Big Pharma’s Year of Bad Behavior Part II: Gaming the System to Undermine Competition at the Expense of American Patients.

CLICK HERE to read: “Dose Of Reality” Big Pharma’s Year of Bad Behavior Part III: Angling to Price-Gouge American Public on COVID-19 Treatments Taxpayers Paid to Develop.