340B State Legislation: North Carolina

The 340B program enables participating hospitals to purchase medications at significant discounts and sell them to plan sponsors at the prevailing rate, a “buy low, sell high” scheme that results in profits at the expense of working families. There is no guarantee that 340B profits are passed to vulnerable patients in local communities. At the same time, the program raises prices by incentivizing hospital systems to markup medications, consolidate, and prescribe more, higher-cost drugs and fewer biosimilars.

Unfortunately, North Carolina policymakers are considering proposals that would exacerbate the impact of 340B, which would further increase healthcare costs for North Carolina families and perpetuate healthcare consolidation.

Analyses indicate the proposal could increase employer costs by about $13 per beneficiary, totaling roughly $62 million annually for North Carolina employers. These added costs would come on top of the rebates employer-sponsored health plans already forgo when drugs are dispensed through 340B – an estimated $221 million each year. The program also enables significant markups: a 2024 report by the NC State Treasurer found that hospitals charged the State Health Plan for Teachers and State Employees, a member of this coalition, 5.4 times their 340B-discounted acquisition cost for cancer medicines, generating thousands of dollars per claim. Together, these findings underscore the need for greater transparency and accountability in the 340B program.

The National Alliance and the North Carolina Business Coalition on Health together urge policymakers to prioritize reforms that strengthen oversight and accountability before considering measures that further accelerate 340B growth.