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At the center of this debate is a bipartisan group of senators, informally dubbed the "Gang of Six," who are quietly working on potential changes to the 340B drug pricing program. On the Republican side, Senators John Thune (SD), Jerry Moran (KS), and Shelley Capito (WV) have joined their Democratic colleagues, Senators Debbie Stabenow (MI), Ben Cardin (MD), and Tammy Baldwin (WI), in tackling the future of this crucial program.
For those unfamiliar, the 340B program allows hospitals and healthcare providers in low-income and rural areas to purchase medications at discounted prices from pharmaceutical companies. These savings are vital, allowing hospitals to remain financially viable and continue providing services to underserved communities. The discounted drugs are often sold at regular prices to insured patients, allowing these healthcare providers to use the profit margin to cover costs, pay healthcare staff, and maintain operations.
Why does this matter? Because rural states like South Dakota, West Virginia, and Kansas rely heavily on the 340B program to keep their healthcare facilities open. For example, South Dakota, despite its sparse population, has 339 active 340B entities, providing much-needed healthcare access to its rural communities. West Virginia, one of the poorest states in the country, has over 1,060 of these entities, and Kansas has 946. These numbers underscore how essential the program is for ensuring that working-class and rural patients have access to hospital services.
But this isn't just about those three states—it's about the broader picture of healthcare access in rural America. Across the country, rural hospitals are struggling to keep their doors open, and the 340B program is a lifeline. Just in the past month, we’ve seen MercyOne closing its Primghar location in Iowa, the Regional Health System shutting down its Norman Regional Hospital in Oklahoma, and a temporary closure of a 340B facility in rural Ohio. Without 340B, these closures would likely become far more common.
The pharmaceutical industry, unsurprisingly, isn't a fan of the program. They’d rather see these discounts eliminated, arguing that hospitals should rely on government funding or higher taxes to stay afloat. However, the reality is that Big Pharma agreed to 340B in exchange for access to lucrative Medicare and Medicaid markets, and now they want to renege on that deal. If they succeed, rural communities could be left without access to healthcare, or taxpayers could be forced to foot the bill for direct government bailouts to struggling hospitals.