Rachid Akiki, Head of Regulatory & Clinical Affairs at 2San, said the 340B drug discount program, originally meant to aid hospitals serving low-income populations, is now the center of a financial dispute over lost Medicaid rebates. The statement was made on X.
“A multibillion-dollar clash is brewing over the 340B drug discount program,” said Akiki, “Designed to help hospitals serve low-income patients, it’s now under fire. Drugmakers say it’s costing Medicaid $6.5B in lost rebates. Critics claim some hospitals are pocketing the savings instead of reinvesting in care.”
The 340B Drug Pricing Program was created by Congress in 1992 to help healthcare providers stretch scarce federal resources. It allows eligible hospitals and clinics to purchase outpatient drugs at discounted prices. According to the American Hospital Association, the program supports providers serving vulnerable and low-income populations.
The Medicaid and CHIP Payment and Access Commission reported in its March 2023 publication that drug manufacturers estimate the 340B program leads to $6.5 billion in lost Medicaid rebates. This is due to duplicate discounts when drugs are subject to both Medicaid rebates and 340B pricing. The issue has contributed to ongoing tensions between providers and drugmakers.
PhRMA reports that 25 hospitals in New Jersey participate in the 340B program, holding 547 contracts with pharmacies across the country. Of these contract pharmacies, only 18% are located in medically underserved areas, which may affect the program’s intended impact. Furthermore, 16% of participating hospitals in New Jersey provide charity care at levels below the national average.
Rachid Akiki is Head of Regulatory and Clinical Affairs at 2San and has led initiatives in healthcare strategy, innovation, and regulatory compliance. He previously served as Medical Director at XRWorkout and Chief Operating Officer at Book Doctors. He holds degrees from Harvard Medical School and Hult International Business School.
