Investments in Uncompensated Care and Vulnerable Populations Have Decreased on Average While Hospital Investments in Financial Portfolios Have Ballooned
A new analysis of 340B hospital data found that the number of Disproportionate Share Hospitals (DSHs) participating in the 340B Drug Pricing Program1 has surged more than sixfold, rising 565% from 2004 to 2023, with little evidence of commensurate growth in benefit to vulnerable populations. Yet, following 340B enrollment, DSHs’ financial investments, including stocks, bonds and other financial instruments, soared.
“Most 340B disproportionate share hospitals have morphed into corporate profit machines, putting Wall Street-style growth ahead of patient care. Many hospitals that joined the program in 2016 and 2017 boosted their financial portfolios – while slashing the amount of free and discounted care they provided. This isn’t just a betrayal of the program’s purpose – but a betrayal of public trust,” said Mike Kapsa, Board Member, CARH.
In theory, DSH participation in the 340B program should enhance care for vulnerable patients. But the data tell a different story: 340B DSHs are reducing their commitment to uncompensated care, all while growing financial reserves and investments. The study found DSHs that joined 340B between 2016 and 2017 reduced their spending on free or reduced cost care by 22%, on average, while increasing financial investments by 89% in the five years following enrollment.
“We continue to see growth in 340B drug sales and questions around hospital use of these funds,” said Amanda Forys, Managing Partner, Magnolia Market Access. “This study supports the same narrative – disproportionate share hospitals are not directing 340B revenue toward patient care. Policies that promote appropriate use of 340B funds are needed to make sure vulnerable patients benefit from these steep drug discounts.”
The analysis and report were completed by Magnolia Market Access, made possible through support from CARH. To access the full analysis, visit HERE and learn more about how non-profit DSHs are misusing 340B revenue and the importance of program oversight to ensure vulnerable patients benefit, not corporate interests.
About Magnolia Market Access: Magnolia Market Access provides tailored strategies and insights to pharmaceutical companies, device manufacturers, and trade associations to meet their market access, HEOR, and healthcare policy needs. Our experts provide 360-degree perspectives and analysis of our in-house and client-specific clinical and real-world data to shape policy, communicate value, secure reimbursement, and drive patient access. For more information, visit https://www.magnoliamarketaccess.com.
About CARH: Community Action for Responsible Hospitals (CARH) is a non-profit organization of patient-focused stakeholders including labor unions, faith leaders, healthcare providers, consumer advocates, and public interest groups. For more information, visit https://www.betterhospitalsnow.org
1 Established in 1992 under the Public Health Service Act, the 340B Drug Pricing Program is a federal program that provides discounts on outpatient prescription drugs to “covered entities,” such as qualifying hospitals and clinics that treat a high number of low-income and uninsured individuals.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250709957376/en/
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Media Contact: media@betterhospitalsnow.org