ADAP Advocacy, as part of its 340B Project and in collaboration with the Community Access National Network (CANN), has unveiled a detailed report on the 340B Drug Pricing Program, focusing on its effects on the revenues and executive compensation of covered entities. The report, titled "The 340B Drug Pricing Program and its Potential Impacts on Annual Revenues, Executive Compensation, and Charity Care Provision in Eligible Covered Entities", reveals that annual revenues for these entities surged by an average of 824.32%, while executive pay saw an average increase of 231.51%.
Brandon M. Macsata, CEO of ADAP Advocacy, commented on the findings, stating, "It is no wonder that hospitals and mega service providers are fighting so hard to stop reforms to the 340B Program…because it is a cash cow for their organizations' bank accounts and their CEOs' wallets. What is even more troubling is for hospitals, their charity care levels have dropped precipitously over time. It is reflective of a larger problem with the program in that its priorities are out of whack, and we need to return 340B to its original legislative intent: helping patients!"
ADAP Advocacy conducted an exhaustive analysis of publicly available IRS 990 filings for 69 340B-eligible covered entities, which included 24 HIV Care providers, 38 hospitals, and 7 other types of entities. The analysis aimed to assess annual revenues, executive compensation, and charity care provision both before and after the entities became eligible for the 340B program.
The report's findings are significant as they highlight a potential misalignment between the original intent of the 340B Drug Pricing Program and its current implementation. Originally designed to help healthcare providers serving low-income patients, the program appears to have become a major revenue generator for some entities, raising questions about resource allocation and the ethical responsibilities of covered entities.
As concerns around healthcare affordability and access continue to grow, the revelations from this report could prompt policymakers and stakeholders to reconsider the structure and oversight of the 340B program. The goal would be to ensure that it serves its intended purpose of aiding vulnerable patient populations rather than disproportionately benefiting the financial interests of executives and large healthcare organizations.
The full report is available for download here.
