Protecting the 340B Program
As a leader in rural healthcare, I can attest firsthand to the indispensable role the 340B Drug Pricing Program plays in maintaining healthcare access for our most vulnerable communities. For over 30 years, this program has served as a lifeline for rural and safety-net hospitals across America, allowing us to stretch limited resources and continue serving patients regardless of their ability to pay.
The 340B program represents a rare policy success: it costs taxpayers nothing while delivering tremendous value to communities in need. By requiring pharmaceutical manufacturers to provide discounts to qualifying hospitals in exchange for Medicaid and Medicare participation, the program helps offset the rising costs of medications that threaten to overwhelm our healthcare systems.
Rural hospitals operate on razor-thin margins. They serve communities with higher percentages of elderly, low-income, and uninsured patients, while facing all the challenges of attracting healthcare professionals to non-urban settings. The harsh reality is that without programs like 340B, many rural hospitals cannot survive.
The numbers tell a sobering story. According to hospital representatives who testified on LB168, more than half of Nebraska's rural hospitals report that cuts to the 340B program could force them to close their doors. Many rural hospitals across the state have reported significant drops in 340B savings—some by as much as 40% in just one year—due to manufacturer restrictions.
When rural hospitals close, entire communities lose access to emergency services, primary care, and specialty services. Patients must travel further for care, often leading to delayed treatment and worse health outcomes. The economic impact on rural communities is equally devastating, as hospitals are frequently among the largest employers in the areas they serve.
Despite its proven track record, the 340B program faces unprecedented threats. Since 2020, numerous pharmaceutical manufacturers have unilaterally restricted access to 340B pricing for contract pharmacies, violating decades of precedent and the intent of federal law. These restrictions directly impact healthcare facilities' ability to serve patients, particularly in rural areas where contract pharmacies are essential for medication access.
Critics often mischaracterize the program's size and impact. The truth is that 340B discounts represent only about 3% of drug companies' global revenues, while pharmaceutical profits continue to reach record highs year after year. A recent report by Public Citizen titled "Profits Over Patients" revealed that manufacturers of the first 10 drugs selected for Medicare price negotiation spent $10 billion more on stock buybacks, dividends, and executive compensation than on research and development in 2022 alone. These same companies spent over half a billion dollars on executive compensation in a single year. The program's growth primarily reflects pharmaceutical companies' pricing decisions and broader shifts in healthcare delivery, not abuse of the program.
Nebraska's LB168, the 340B Contract Pharmacy Protection Act, represents a critical step toward safeguarding this vital program. Following the lead of states like Arkansas, Kansas, and Missouri, this legislation would prohibit manufacturers from restricting access to 340B pricing and from imposing burdensome data requirements that make the program unworkable for smaller facilities.
I am deeply grateful to Senator Brian Hardin for introducing this legislation and to the members of the Nebraska Legislature who have advanced the bill to enrollment and review. Many of these legislators have faced targeted, misleading advertisements meant to undermine their support for the 340B program. Their willingness to stand strong for rural healthcare despite this pressure demonstrates true leadership and commitment to Nebraska's most vulnerable citizens. By moving LB168 through the legislative process, these lawmakers have prioritized healthcare access over special interests.
The Banking, Commerce and Insurance Committee deserves particular recognition for their consideration of this complex but crucial issue. Their work ensures that rural Nebraskans will continue to benefit from the vital services that 340B makes possible in our communities.
The impact of 340B extends far beyond abstract policy discussions. In practical terms, the program enables rural hospitals to provide free or reduced-cost medications to uninsured and underinsured patients, maintain essential services that would otherwise operate at a loss, fund outreach programs that bring preventive care to remote communities, keep emergency department doors open 24/7, offer critical specialty services locally, and support medication management programs that improve health outcomes. For many Nebraskans, especially those in rural communities, these services make the difference between receiving timely care and going without essential treatment.
When pharmaceutical companies restrict 340B access, these services are immediately threatened. This isn't about hospital profits—it's about maintaining access to basic healthcare services in communities that have few alternatives. Meanwhile, these same pharmaceutical companies spend billions more on advertising, executive bonuses and shareholder enrichment than on developing new medications. When pharmaceutical executives claim that programs like 340B threaten innovation, the financial data simply doesn't support their argument.
As Nebraska legislators consider LB168, I urge them to recognize what's truly at stake. This isn't simply a matter of business relationships between hospitals and pharmaceutical companies. It's about whether rural Nebraskans will continue to have access to affordable healthcare in their communities. It's about protecting critical access hospitals that serve as healthcare lifelines for entire counties. It's about ensuring that a senior on a fixed income doesn't have to choose between filling their prescription and buying groceries.
We need decisive action to protect the 340B program, both through state-level protections like LB168 and through continued federal enforcement of program requirements. Without such action, the pharmaceutical industry will continue to undermine a program that has been an unqualified success for three decades. According to a 2023 Kaiser Family Foundation poll, 82% of Americans believe prescription drug prices are unreasonable, and 73% say the government is not doing enough to regulate drug prices. LB168 represents a concrete step Nebraska can take to address this widely recognized problem.
To those who have already supported this critical legislation, please accept sincere gratitude on behalf of rural healthcare providers and the communities they serve. Your leadership on this issue truly makes a difference in the lives of countless Nebraskans.
For those still considering their position, I invite you to visit rural healthcare facilities and see firsthand how the 340B program translates into real healthcare services for real people. The program's impact goes far beyond financial spreadsheets—it's visible in the faces of patients who receive care they otherwise couldn't afford and in communities that maintain access to local healthcare instead of watching their hospitals close. The program's impact goes far beyond financial spreadsheets—it's visible in the faces of patients who receive care they otherwise couldn't afford.
The future of rural healthcare in Nebraska depends on protecting programs like 340B. With your support, we can ensure that all Nebraskans, regardless of where they live, continue to have access to quality, affordable healthcare.
