Access helpful documents, infographics, webinars, newsletters, playbooks, and more designed to help organizations move health equity and value forward.
Access helpful documents, infographics, webinars, newsletters, playbooks, and more designed to help organizations move health equity and value forward.
Access helpful documents, infographics, webinars, newsletters, playbooks, and more designed to help organizations move health equity and value forward.
Access helpful documents, infographics, webinars, newsletters, playbooks, and more designed to help organizations move health equity and value forward.
Illinois employers are feeling the strain of rising healthcare costs while trying to preserve benefits, support their workforce, and stay competitive. As costs continue to climb, employers are looking more closely at what is driving them. The 340B Drug Pricing Program is becoming a bigger part of the conversation, but limited transparency around how the program operates and where savings go makes it difficult to assess its true impact.
To help employers better estimate how much 340B may be increasing their healthcare costs, the National Alliance for Healthcare Purchaser Coalitions recently launched a first-of-its-kind tool, the 340B Employer Cost Impact Calculator. The National Alliance also recently unveiled new maps that depict how the program has spread in Illinois, raising questions about whether contract pharmacies and covered entities are truly improving access for underserved patients.
These tools underscore the risk of advancing legislation like HB 2371, which would expand the program before establishing any transparency measures needed to properly assess its impact— worsening the burden on employers and working families without any clear evidence that expansion is delivering better outcomes.
Together, these tools tell a clearer story about both the scale of the 340B program and its growing cost to employers and working families.
To understand what the new tools are revealing, it is worth revisiting what 340B was meant to do. 340B was originally created to help safety-net providers stretch scarce resources and support vulnerable patients. Today, it is unclear whether the program is working as intended due to a lack of transparency and guardrails. Since 2010, the number of Illinois hospitals participating in 340B has tripled, from 34 to 112. Over that same period, hospital outpatient offices registered as “child sites” expanded from roughly 25 to nearly 1,250, and the number of contract pharmacies grew from just five to 1,243.
The new maps show just how far 340B has spread. Rather than being narrowly concentrated in underserved or rural communities, Illinois’s 340B footprint is clustered heavily in urban, suburban, and comparatively affluent areas, especially in and around Chicago. The footprint does not on its own prove misuse, but it does make the usual access argument harder to take at face value. The program’s footprint looks far less targeted to underserved communities than its defenders often suggest.
Covered Entities and Child Sites, Statewide
Contract Pharmacies, Statewide
The Cost Calculator helps illuminate the other side of the story: what this expansion may be costing employers and working families. 340B drives up costs for employers in several ways. The program can encourage hospital consolidation, which often leads to higher prices, and it creates incentives for 340B hospitals and clinics to prescribe higher-cost medicines because the profit “spread” between the discounted purchase price and the reimbursement is larger. It can also reduce rebates that would have otherwise lowered costs for employers. Under normal market arrangements, those rebates help reduce premiums and patients’ out-of-pocket costs at the pharmacy counter. However, when drugs are purchased through 340B, those savings often do not flow back to employers and working families.
According to IQVIA, lost rebates alone increase healthcare costs by $35 per beneficiary in Illinois, adding more than $223.8 million each year to healthcare costs for businesses and families. Public employee health plans are also affected. The Illinois state health plan paid an average of 132% above acquisition cost for 340B drugs, for a total of roughly $40.6 million. Public teacher health plans in Illinois paid $15.6 million, and local government plans paid $13.8 million in overcharges.
For public and private employers, those dollars do not disappear into the system. They show up in higher premiums, greater cost sharing, and fewer resources available for wages, hiring, and benefits. That makes the central question unavoidable: if employers and working families are helping finance the system, what are patients and communities receiving in return?
While the footprint is easy to see and the employer cost is increasingly measurable, what remains hardest to see is the patient benefit. Across Illinois, the available data shows:
More than 60% of the state’s 183 hospitals participate in 340B.
Advocate Christ Medical Center devotes just 0.8% of its operating costs to charity care
Conclusion
If 340B is meant to support vulnerable patients, the public should be able to see that more clearly in the available data.
There is still much about the program that remains opaque, but these new tools make two things harder to ignore: its footprint has expanded dramatically, and employers and working families are helping finance it. The current proposed legislation, HB 2371, is projected to raise this cost burden by an estimated $89 million annually in lost rebates alone.
If Illinois is going to continue expanding 340B, employers and working families deserve a clear accounting of what they are paying for — and credible evidence that patients and communities are better off.
Policymakers should carefully consider whether those questions can be answered with real transparency before further exacerbating the impact of 340B on working families.
