California voters hold accountable health care providers using drug program | Comments

Guest Comment written by

Julie Gill Shuffield

Julie Gill Shuffield is the executive director of Patients Come First California.

Although the legislative vote won’t be confirmed until next month, the results were clear enough to declare victory for California’s health care ballot measure, Proposition 34, an effort to make sure that the money from the sale of drugs is used only for health care. .

Prop. 34 confronts long-term abuse of the federal 340B drug program and would hold actors accountable if providers don’t spend 98% of their money on patients. California voters got it right.

The 340B program was intended to facilitate drug discounts for organizations such as hospitals and non-profit clinics so they could pass the money on to patients. The idea is simple enough: Hospitals are in a position to use discounts for the benefit of people who do not have medical access, and the price of the drug should be lower for patients – but that does not happen. In fact, these bad actors buy deeply discounted prescription drugs and then turn around and charge patients and insurance companies higher prices while pocketing the difference.

Although the contents of Prop. 34 given to California voters in the state’s election guide had no specifics – it just said the revenue should not be used to buy stadiums and pay huge CEO salaries – it was enough to convince voters to support it.

The 340B program lacks transparency and oversight, and the data reveals a large and rapidly growing problem. In a 2020 investigation, the United States Government Accountability Office found more than 1,500 violations of the 340B law. Investigation reports show that hospitals across the country, including California, were paying patients who were eligible for charity care and were misleading patients about their medical coverage.

This has become a trend in the Golden State, with health care facilities in the hospital deserts unable to charge patients exorbitant prices for basic medical care. These hospitals buy drugs at discounted prices and charge patients 200-700% more than making a profit.

To be clear, a small administrative fee to cover the costs of purchasing and dispensing it is reasonable, but this is a price hike that targets the most vulnerable patients who need the prescribed medicines. Prop. 34 allows a 2% payment, but the remaining 98% must be spent directly on patient care.

There are urgent calls for Congress to change the 340B program, and some manufacturers are proposing cuts that would ensure lower costs for patients. Unsurprisingly, the hospital industry has fought back. Since Prop. 34 is over, they are probably already playing on Monday morning and wish they had agreed to the protection and transparency.

We can only hope that 340B donors have received the wake-up call given by California voters and will come to the table with practical solutions.

When revenues are not directed at patients, their quality of life is affected. Now, under Prop. 34, these bad actors are the ones who affected their business life. What a strange, bitter pill to swallow.