NCHA Statement on Treasurer’s 340B Report

Raleigh, NC – May 8, 2024 — Once again, the Treasurer is painting a false picture about the mission-driven care provided by North Carolina hospitals. The 340B Program helps safety-net providers serving vulnerable communities stretch scarce federal resources as far as possible to support essential services for their communities. The program is paid for with drug discounts, not state or federal tax dollars.   

To qualify, non-profit/governmental providers must serve a high number of low-income and uninsured patients to purchase certain outpatient drugs at discounted prices. These providers include rural hospitals, non-profit hospitals, Federally Qualified Health Centers (FQHCs), Ryan White grantees, and specialized clinics that serve hemophilia and tuberculosis patients.   

The ability to obtain third-party reimbursement for drugs purchased at 340B prices is a critical component of the program for participating providers; the difference between their price and the reimbursed amount is an important component of the healthcare safety net that cares for the poor, uninsured, and underinsured. Although the 340B program is not funded through taxpayer or appropriated dollars, it is a part of a larger policy debate regarding care subsidies and requirements of those in the healthcare marketplace to do public good.    

Congress did NOT create the 340B program for price discounts to be passed to insurance companies.  Padding insurer profits was not — and never will be — the purpose of the 340B program. The Treasurer should engage in honest policy discussions about the rising costs of pharmaceutical drugs and the cost burden for patients with insurance instead of issuing half-baked theories funded by special interest group Arnold Ventures.   

Hospitals participating in the 340B Program comply with strict federal reporting requirements to as a condition for 340B discounts. In addition, hospitals report uncompensated care, charity care and other benefits provided to the communities they serve through both the Medicare cost reports and the IRS 990 form required for tax-exempt organizations. In 2022, North Carolina hospitals alone provided nearly $6.12 billion in community benefits. At the same time, drug companies are not required to report information about how they set their prices or how much they decide to increase their prices. That type of information would be important in understanding drug companies’ pricing decisions and how we can mitigate arbitrary and egregious price increases for drugs that are critical and lifesaving for patients.   

340B savings help fund a variety of services that might otherwise be unavailable to North Carolinians including improving access to medication and healthcare services for vulnerable communities; 24/7 access to emergency services in rural communities; community outreach programs; cancer treatment; OB/GYN services; mobile treatment clinics for underserved areas; diabetes education and counseling; and medication therapy management.  

About NCHA 

Founded in 1918, North Carolina Healthcare Association (NCHA) is the united voice of the North Carolina healthcare community. Representing more than 130 hospitals, health systems, physician groups and other healthcare organizations, NCHA works with our members to improve the health of North Carolina communities by advocating for sound public policies and collaborative partnerships and by providing insights, services, support, and education to expand access to high quality, efficient, affordable, and integrated health care for all North Carolinians.