Large pharmacies continue to exploit federal program; consumers suffer | Opinion
As a pharmacist and owner of a 99-year-old independent pharmacy in Merced, I have witnessed firsthand the health care access challenges members of our community often face. I’ve watched patients walk out the door without their medication due to high out-of-pocket costs too many times to count. Others have expressed that they must ration their prescriptions so that they last longer.
Unfortunately, this is not an unusual phenomenon: More than half of Californians reported skipping or postponing care due to cost in 2024. While our state legislators are right to look for ways to address barriers to health care, current legislative proposals from the California Assembly to expand a federal program will not help patients access care and could actually harm independent pharmacies like mine in the process.
The federal 340B program allows eligible healthcare providers to purchase certain medications at discounted rates, with the expectation that savings accrued from the program will be passed on to underserved or low-income patients. However, this well-intentioned program has gone off track.
Large, for-profit pharmacy chains have infiltrated the 340B program and are increasingly capitalizing on these discounts that are meant to help patients in need. Hospitals participating in this program are allowed to contract with pharmacies to dispense these medications, and pharmacies are able to reap significant profits from working with program-affiliated health care facilities.
More than half of the U.S. pharmacy industry is contracted to dispense 340B drugs. Profit margins for these contract pharmacies are more than three times higher than those of independent pharmacies dispensing non-340B drugs.
This exploitation of the 340B program as large pharmacies continue to entrench themselves has tangible impacts on our community. Only 23% of 340B contract pharmacies are located in medically underserved areas, limiting access for the very patients the program is supposed help and new contract pharmacies are often clustered in affluent, predominantly white areas.
In Merced, this means that vulnerable patients may have to travel significant distances to access their medications, imposing additional burdens on those already facing health and financial challenges and potentially worsening health disparities for underserved communities.
And while contract pharmacies continue to spread and reap even more profit from 340B, this growth of the program has not translated into improved patient care. The number of contract pharmacies has grown by more than 2,400% since 2010, yet there is little evidence that this expansion has benefited patients.
In addition, independent pharmacies play a crucial role in communities like Merced, offering personalized services, fostering trust with patients, and ensuring patients can get the car they need. However, the current trajectory of the 340B program threatens the survival of mom and pop pharmacies as large chain pharmacies continue to expand to siphon more profits from the program, giving them the upper hand in the market.
Ultimately, this hurts patients the most who could lose out on the only healthcare provider in their area if independent pharmacies like mine are forced to shut our doors.
What’s worse is California lawmakers are considering Assembly Bill 1460. This legislation falls short of bringing any meaningful reform to the 340B program to ensure patients are benefiting. Rather than rectifying the program’s shortcomings, it risks exacerbating existing problems, potentially leading to further consolidation among large pharmacy chains and diminishing the role of independent pharmacies.
The 340B program has the potential to be a lifeline for vulnerable populations, but as it currently stands, the program can’t live up to its potential as it continues to be exploited for profit by large pharmacy chains. I urge California lawmakers to reject Assembly Bill 1460, which would allow continued abuse of the of the program at the expense of patients.
