New Report: PBMs Are Siphoning Money from Patients in the 340B Program

A recent report found that the dominance of pharmacy benefit managers (PBMs) in the 340B drug pricing program benefits these large middlemen corporations—not the patients in need that the program was designed to help. Under the 340B program, health organizations provide discounted drugs to patients in need.

U.S. Senator Bill Cassidy (R-LA)’s report exposes how PBMs and their affiliated pharmacies extract money from the 340B program for their own profit. According to the report, in 2023, more than half of the U.S. pharmacy industry—over 33,000 pharmacies—participated in the 340B program, with five major PBMs controlling 75% of these relationships. The dominance of PBMs in the 340B program has created a problem: more than half of the profits that contract pharmacies accrue through 340B benefit only four PBM and pharmacy companies—CVS Health, Express Scripts, Walgreens and Walmart.

In fact, some PBMs own or control entities that profit directly from the 340B program. For instance, more than 85,000 contracts exist between 340B providers and the three largest PBMs. This vertical integration leads to higher profits for the PBMs, while undermining the program’s mission of helping those who need it most.

To protect the integrity of 340B and ensure that the program benefits patients directly, Congress must act. It’s time for policymakers to explore potential solutions like:

·       Increasing transparency in 340B pricing, revenues, and contracts.

·       Preventing PBMs from profiting based on 340B drug pricing.

·       Preventing PBMs from steering patients towards PBM-owned pharmacies.

·       Ensuring 340B savings benefit patients directly.

Learn more about the PBM issue and legislative solutions here.