Drug discounts help hospitals stay afloat, expand services

A new study by a safety net hospital organization concludes that the 340B drug program saves each participating hospital an average of $5.2 million a year.

The federal 340B Drug Pricing Program provides discounts on outpatient prescription drugs to all providers that care for low-income patients. The 340B program is a crucial financial component of their ongoing operations, with average savings of 27 percent on their pharmaceutical purchases, according to the report by the Safety Net Hospitals for Pharmaceutical Access.

Of all the hospitals surveyed, 100 percent say the program is important to their ongoing operations, while 85 percent say it is critical. Altogether, 93 percent say they use the savings reaped by 340B to reinvest in providing more services to low-income and uninsured patients.

"Safety net hospitals have been using their program savings to provide, improve and expand services in innovative and cost-effective ways and will continue to rely on the program post-healthcare reform," wrote the report's authors, who are former analysts with the Department of Health & Human Services' Office of the Inspector General.

For more:
- read the report (.pdf)

Suggested Articles

As the public debate on health reform rolls on, a new report analyzes how these different approaches could impact insurers' bottom lines.

A House panel is going to consider several changes to Nancy Pelosi's drug prices plan, including stiff penalties for not being transparent.

Molina aims to bolster its Medicaid business by acquiring certain assets from New York-based YourCare for $40 million.