Measuring the Effectiveness of the 340B Program

Abstract

Virtually every aspect of the 340B drug discount program has been evaluated except its effectiveness at improving healthcare access for medically underserved populations. This paper seeks to fill this information gap by using federal data to measure changes in the ability of impoverished and uninsured patients to afford needed healthcare, relative to the general population. The paper finds that the 340B program is harming the relative affordability of needed prescription drugs, needed medical care, and needed dental care for the most medically underserved communities. The causes of this decline in affordability is traced to a three-fold process that 340B hospitals are using to take maximum advantage of the program’s financial incentives.

Keywords: 340B, hospitals, pharmacies, medically underserved, program effectiveness

JEL Classification: I11, I14, I18