340B – A missed opportunity to address those that are medically underserved

By Xcenda

With all the lawsuits and frustration with the 340B program, the heart of the contention is the intent of the 340B program. One Health Affairs study analyzing the 340B program stated that it “was intended to give assistance to low-income and uninsured patients.” However, in recent years, the goal posts seem to have shifted to more indirectly give assistance to low-income and uninsured patients through revenue generation for 340B entities that serve these populations.

Xcenda conducted an analysis of 340B covered entities, and found there is a small share of disproportionate share (DSH) hospitals, their child sites, and affiliated contract pharmacies located in areas of the United States that are most in need of these providers—specifically, in medically underserved areas (MUAs). These MUAs have too few primary care providers, high infant mortality rates, high poverty rates, and/or large elderly population. Despite the stated DSH purpose of “serving a significantly disproportionate number of low-income patients,” Xcenda found less than 4 in 10 DSHs are in MUAs. And the percentages of entities in MUAs was even lower for child sites and contract pharmacies. Our analysis shows that the vast majority of 340B-enrolled DSHs, their child sites, and affiliated contract pharmacies are not located in areas where healthcare providers are needed to help reach these patients. Having so few 340B hospitals, clinics, and contract pharmacies located in MUAs is antithetical to the mission of the 340B program.

Congress and HRSA should consider revisiting the eligibility standards for the 340B program to ensure these standards permit only true safety-net facilities to be eligible for 340B discounts and to prevent the 340B program from being used solely as a profit center for hospitals and pharmacies that do not serve low-income and underserved patients in the communities where they live.

This work was done on behalf of AIR340B; editorial control was maintained by Xcenda.

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Issue brief

340B and health equity:
a missed opportunity in
medically underserved areas

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