Case Study: How Hospitals and Pharmacies Profit Off 340B

(Retail Prescription Medicine for Uninsured Patient)

When 340B discounted medicines are shipped to contract pharmacies, the hospital and
pharmacy profit while the patient may see no direct benefit from the 340B discount
Hospital can share spread
between 340B price and full Example assuming
retail price with pharmacy
$100 medicine:
Manufacturer Discounted 340B purchase
Hospital -$50 price paid by hospital
Full retail price paid by
Manufacturer provides +$100 uninsured patient
340B hospital with
discounted medicine $50 profit for 340B hospital to share
with contract pharmacy
Assuming a
50% discount Patient Pharmacy How are
profits
Uninsured patient is Patient goes to contract used?
treated at a 340B pharmacy and fills
hospital prescription at full retail price CONFIDENTIAL ‹#›

Note: This is a simplified example for basic educational purposes.

 B (15): revised 7/5

340B Contract Pharmacy Participation Has Increased Dramatically

The number of contract pharmacy arrangements has grown by more than 5,000% since the 2010 guidance. Currently, more than 30,000 distinct
pharmacies participate in the 340B program, and each one may have arrangements with multiple entities.

340B Hospital Contract Pharmacies and Pharmacy Arrangements*

400,000

300,000
2010
HRSA
200,000 guidance

100,000

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Contract pharmacies Contract pharmacy arrangements

*A contract pharmacy may have multiple contracts with multiple 340B hospitals.

1. BRG analysis of HRSA OPA registrations. https://340bopais.hrsa.gov/ContractPharmacySearch

Medicines in 340B
 Contract Pharmacies Have Growing Financial Stake in 340B
There is no clear evidence 340B discounts are helping patients access medicines

Concentrated Corporate PBM-Owned Pharmacies

Massive Profit Margins
Profits Wield Negotiating Power

3 > 50% Sales

1
More than half of 340B profits 40% of arrangements are
0.72
retained by contract between 340B entities and
0.22
pharmacies are concentrated pharmacies associated with
0
Non-340B medicines dispensed through independent pharmacies in four pharmacy one of the three largest
companies PBMs
CONFIDENTIAL ‹#›
Berkeley Research Group, “For-Profit Pharmacy Participation in the 340B Berkeley Research Group, “For-Profit Pharmacy Participation in the 340B Drug Channels analysis of HRSA Office of Pharmacy Affairs daily
Program,” October 2020. Program,” October 2020. contract pharmacy database. Published April 2022.