Healthcare Leaders Offer Solutions for Reforming 340B in New Issue of Evidence-Based Oncology

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Depending on one's point of view, the 340B prescription drug program keeps safety net hospitals afloat or serves as a profit center at the expensive of community providers. Three leading voices-Rena M. Conti, PhD; Peter B. Bach, MD, MAPP; and Michael Kolodziej, MD; recommend reforms in the new issue of Evidence-Based Oncology, a publication of The American Journal of Managed Care.


PLAINSBORO, N.J.—In 2015, longtime complaints about misuse of the 340B prescription program spilled into the policy arena, fueling a report from the Government Accountability Office and a new guidance from the federal agency that runs the program.

In light of these steps, Evidence-Based Oncology, a publication of The American Journal of Managed Care, this month presents, “Three Proposals to Reform the 340B Drug Discount Program,” from three healthcare leaders: Rena M. Conti, assistant professor of health policy and economics, University of Chicago; Peter B. Bach, MD, MAPP, director of the Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center; and Michael Kolodziej, MD, national medical director, Oncology Solutions, Aetna.

The authors discuss the good intentions of 340B, as well as its current problems. (Watch Dr. Bach outline the issues of 340B.) The program allows hospitals that serve the poor to buy prescription drugs at deep discount. These hospitals in turn can charge full price for the drugs to insurers, including Medicare. Because the program has become so vast, those discounts have to be factored into pricing and are driving up drug costs overall.


Drs. Conti, Bach, and Kolodiziej have viewed this problem through multiple lenses—as front-line providers and policy leaders, and for Kolodziej, now as a payer. In their commentary, they offer the following solutions:

  • Define who qualifies for 340B based on the vulnerability of the outpatient population.
  • Pass the discounts to payers and patients, regardless of their insurance status.
  • Only give the discounted drugs to patients of limited means, regardless of whether the provider has “safety net” status.

Watch Dr. Kolodziej discuss the solutions.

“Although the 340B program’s intent was clearly well-meaning, and many 340B providers are doubtless pursuing the goals of the program, it is also clear that the program has become a profit center for participating hospitals, clinics and contract pharmacies,” the authors write. This distorts where patients seek care and boost costs—without any connection to quality.

About the Journals and

The American Journal of Managed Care celebrates its 20th year in 2015 as the leading peer-reviewed journal dedicated to issues in managed care. distributes healthcare news to leading stakeholders across a variety of platforms. Other titles in the franchise include The American Journal of Pharmacy Benefits, which provides pharmacy and formulary decision-makers with information to improve the efficiency and health outcomes in managing pharmaceutical care, and The American Journal of Accountable Care, which publishes research and commentary on innovative healthcare delivery models facilitated by the 2010 Affordable Care Act. AJMC’s Evidence-Based series brings together stakeholder views from payers, providers, policymakers and pharmaceutical leaders in oncology and diabetes management. To order reprints of articles appearing in AJMC publications, please call (609) 716-7777, x 131.

CONTACT: Nicole Beagin (609) 716-7777 x 131