Garden State Times

The head of a New Jersey health reform group said the federal 340b drug program is causing New Jersey patients to pay higher drug prices.

"The 340B program's original intent was to help low-income and uninsured patients to help low-income and uninsured patients, but, according to the New England Journal of Medicine, there is no evidence to show that is actually happening," Jeannette Hoffman, executive director of Patients Come First-New Jersey (PCF-NJ), told Garden State Times. "Because of the lack of transparency, drug discounts don’t have to go to the beneficiaries for which they are intended."

"As a result, there are many examples of bad actors reselling and marking up discounted drugs to patients and insurance companies, pocketing the difference, or directing them to their own infrastructure improvements," said Hoffman. "The result of the exploitation of 340B is that New Jersey patients ultimately pay higher drug prices, particularly those in underserved and low income communities -- the very population which this program was intended to serve."

Hoffman, announced as executive director of PCF-NJ in March, previously worked as vice president of government affairs and communications for The Commerce and Industry Association of New Jersey. She also worked as an aide to former Gov. Christine Todd Whitman (R-N.J.).

Her comments are in response to comments made last month by the head of the National Consumers League (NCL), who said the 340b program has “poor oversight and transparency” and has been “hijacked by hospitals and contract pharmacies.”

“The program has grown exponentially without a clear statutory purpose or transparency and accountability, and in our view, from the consumer perspective, it has been, for lack of a better word, kind of hijacked by hospitals and contract pharmacies,” Sally Greenberg, CEO of NCL, said on NCL’s “We Can Do This!” Podcast. “And what it’s done is instead of passing along these deep discounts to patients because of poor oversight and transparency, what we're finding instead is that these big entities, the hospitals, the contract pharmacies, and others in the system are pocketing huge numbers of profits.”

“And as a result, patients are not getting the discounts that were originally intended,” said Greenberg.

In an X post promoting the podcast episode, NCL said the 340b program has “grown from $54 billion to $124 billion in 6 years, with profits going to middlemen instead of patients in financial need.”

Established in 1992 and administered by the Health Resources and Services Administration (HRSA) the program aims to provide financial relief to healthcare providers serving vulnerable populations, allowing them to stretch their scarce resources and reach more eligible patients.

Hospitals participating in the 340B program can use the savings to fund essential services and programs, such as free or low-cost medication assistance, expanded access to healthcare, and community outreach initiatives.

Participating hospitals, however, “often extend their 340B discounts to clinics in well-off communities, where they can charge privately insured patients more than those on Medicaid,” reported the Wall Street Journal.

Founded in 1899, NCL is a nonprofit organization founded in 1899 that focuses on fraud prevention, food safety, and advocacy for union workers.  

Greenberg has been the CEO of NCL since 2007. She has a background in law and public policy and previously served as Senior Product Safety Counsel at Consumers Union, the nonprofit publisher of Consumer Reports. She is a graduate of Georgetown University Law Center.