CBO Confirms 340B Drug Pricing Program Increases Costs for Federal Taxpayers

WASHINGTON, D.C. - Today, Congressman Brett Guthrie (KY-02), Chairman of the House Committee on Energy and Commerce, issued the following statement in response to the Congressional Budget Office's (CBO) report released September 9th, which confirmed the 340B Drug Pricing Program encourages behaviors that increase federal spending and raise prices for American taxpayers. Some of those behaviors include incentivizing the prescription of more expensive drugs, reducing negotiated rebates for insurers, and increasing vertical integration among facilities.

"Today, the Congressional Budget Office has further validated my long-standing concerns that the 340B program-while an important lifeline to many of our safety net providers-has the ability to be abused and drive-up overall health care costs for Americans," said Chairman Guthrie. "I'm committed to conducting the necessary work to making sure that the program works for both our safety net providers and patients."

Background from CBO's Analysis:

• From 2010 to 2021, spending on drugs purchased through the 340B program grew by an average of 19 percent annually, exceeding the spending growth seen market wide for prescription drug spending.
• The 340B program is driving up costs for the federal budget by incentivizing clinicians to prescribe more drugs and higher costing drugs and by decreasing manufacturer rebates that otherwise reduce overall patient costs.
• The 340B program is profitable to covered entities and has been documented as a factor driving vertical consolidation among providers, increasing overall health care costs.
• The Affordable Care Act both directly and indirectly expanded participation in the 340B program (through expanding eligibility to more hospitals, expanding Medicaid which allowed more hospitals to meet 340B eligibility, and increasing funding for federal grantees), increasing overall spending in the 340B program, raising costs for patients, and further driving 340B-motivated consolidation.

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