Delaware is facing a serious healthcare crisis. A recent study from last year ranked the state among the top 10 most expensive in the nation for healthcare, underscoring persistent concerns about both accessibility and affordability. This includes rising hospital expenses, insurance premiums, and prescription drug costs.
During my time as President of the New Castle County Council, we worked tirelessly to improve community access to affordable healthcare. However, more needs to be done to resolve this ongoing issue.
That starts with addressing the 340B program and how it is actively contributing to the high cost of prescription drugs. This federal program was originally created to help a small number of safety-net hospitals and clinics that serve low-income and uninsured patients manage rising prescription drug costs. However, despite its good intentions, the 340B program has strayed far from its initial purpose in recent years.
The 340B program has expanded from a modest initiative meant for a few hospitals into a massive system that no longer functions as originally intended—largely due to a lack of proper oversight. From 2005 to 2023, total drug purchases through the program ballooned from $2.4 billion to $66.3 billion.
Yet, the program’s dramatic growth hasn’t translated into better access to affordable medications for the vulnerable patients the program was designed to help. Instead, hospitals are taking advantage of the lack of oversight in the 340B program to boost their bottom line. Since there are no guardrails on how hospitals use the profits generated through 340B, many hospitals and their contracted pharmacies retain the profits, rather than reinvesting them into patient care. We see this right here in Delaware, where 83% of 340B hospitals in the state are below the national average in delivering charity care to low-income and uninsured patients.
These actions have led the 340B program to contribute to inflated healthcare costs. Patients with commercial insurance often pay over 150% more per prescription at 340B hospitals, with some drugs marked up as much as seven times their average sale price. With the exponential and increasingly unchecked growth of the 340B program, deeply discounted drug purchases by hospitals now account for 25% of all drug sales. This naturally forces drug companies and PBMs to shift the costs of the other 75% to make it up. This leads to higher drug prices, increased patient out-of-pocket expenses, and the decline of independent pharmacies, especially in rural and low-income areas. As a result, the 340B program fails to lower drug costs for communities, effectively becoming a hidden tax on our state.
Now, hospitals are doubling down on their strategy of using the 340B program as a machine for profit. More and more physician practices are being consolidated into large hospital systems. These acquisitions distort the overall health care market and push patients into higher cost hospital-based settings, driving up costs for everyone.
All this makes it clear that the 340B program is in dire need of reform. To address it, we must require hospitals and pharmacies to pass 340B savings directly to the eligible patients who need them the most. We should also increase transparency around how discounts are used, implement stricter eligibility requirements to prevent large hospital systems from exploiting the program for profit, and enhance data collection to enable better oversight and accountability. These common-sense changes will help make sure the 340B program returns to its original mission: supporting vulnerable patients, not boosting institutional profits.
Hospitals and contract pharmacies have exploited the 340B program for far too long. It’s time to implement meaningful reforms that help rein in the rising cost of prescription drugs. I urge the state legislature to take action now to restore the program’s integrity and make healthcare more affordable for communities across our state.
Dr. Christopher Alan Bullock, serves as the inaugural Pastor of Canaan Baptist Church of Delaware, National Director of the Social Justice Commission NBC USA Inc, and the first African American New Castle County Council President.
