The 340B drug discount program should be helping patients in need, not boosting pharmacy chain profits

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By Sally Greenberg, Chief Executive Officer, National Consumers League

The federal 340B drug discount program is a worthy and critical program. Created by Congress in 1992, it mandates that pharmaceutical manufacturers participating in the Medicaid program must offer prescription medicines at discounted rates to community health centers and safety-net hospitals serving low-income and uninsured patients. Over the years, this program has given vulnerable patients access to the drugs they need and freed up resources for the qualified facilities to offer more health care services to indigent communities.

Over the past decade or so, however, this valuable program has been increasingly corporatized by for profit entities known to increase costs for consumers including middlemen like pharmacy benefit managers and pharmacy chains. Too many of the dollars circulating through the 340B program are benefiting the well-off and for-profit corporations, instead of consumers with significant health and financial needs. News stories have shined a spotlight on big health systems using the program to bolster profits, while hallowing out critical resources in underserved areas. However, more attention needs to be given to the billions of 340B dollars going to major pharmacy chains like CVS, Walgreens, Walmart and Rite-Aid that are not benefiting the patients this program is intended to serve. Increasingly, however, policymakers at the federal and state level are suggesting bailing out these for-profit entities under the guides of “contract pharmacy” legislation.

Here’s the problem: In 2010, the federal government issued guidelines allowing 340B-eligible health providers to contract with for-profit retail pharmacies to dispense medications, with virtually no rules or safeguards. Since that time, the number of pharmacies participating in the 340B program has grown from 789 in 2009 to over 25,000 today. If this meant more access to affordable drugs for consumer, that would be one thing, but this has not been the case. As contract pharmacies have increased, so too has consumer challenges affording their medicines, nearly in parallel. For example:

  • Even though 340B contract pharmacies are receiving drugs at discounted prices, there is no evidence they are passing those savings onto consumers. One analysis from the respected IQVIA firm found that 340B discounts were shared with consumers in only 1.5 percent of eligible pharmacy claims.
  • Although the 340B program is intended to benefit underserved, vulnerable communities with high proportions of poor and uninsured patients, hospitals in the program are contracting with pharmacies that are not, in fact, in areas afflicted with poverty and a scarcity of health care services.
  • The vast majority of 340B contract pharmacy arrangements are with the aforementioned big national chains like CVS and Walgreens, which are enjoying enormous profits as a result of their participation in the drug discount program. Contract pharmacies collected an estimated $13 billion in gross profits in 2018, with a 72% profit margin on 340B drugs (because they are getting those drugs at a steep discount, which they don’t share with consumers). Needless to say, fattening corporate pharmacy profits should not be this program’s mission.

Contract pharmacy abuse of the 340B program has not gone unnoticed by policymakers in Washington. In January 2024, leaders in the U.S. Senate questioned CVS Health and Walgreens as part of as part of an ongoing investigation into how health care entities use and generate revenue from the 340B Drug Pricing Program. The Government Accountability Office (GAO) and the Department of Health and Human Service Office of the Inspector General (OIG), also highlighted issues with the program’s integrity as it relates to contract pharmacy use. 340B is in desperate need of transparency and oversight, not unfettered expansion.

Yet that is exactly what is happening in some U.S. states. This matter is taking on a greater urgency now as several states are contemplating legislation that doubles down on the problem instead of fixing it. Consumers would be shocked to learn their state representatives are ushering through changes that would further solidify the profitable role these large corporate contract pharmacies are playing in the abused 340B program. Policymakers at the state and federal level need to address a fundamental question – where do 340B savings go? And when the answer is to corporate pharmacy giants – not patients – it’s time to reconsider ill-conceived policies giving contract pharmacies even more access to 340B drug discounts.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL urges Congress to improve air travel as FAA reauthorization progresses

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February 15, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Last week, the U.S. Senate Commerce Committee advanced the five-year reauthorization of the Federal Aviation Administration (FAA). The legislation does contain some victories for consumers, but it does not contain the deep reforms of an uncompetitive industry that are sorely needed.

“Passengers are crying out to Congress to implement real reforms that make flying less miserable,” said NCL Vice President of Public Policy, Telecommunications, and Fraud John Breyault. “The Senate Commerce Committee could have used its twice-a-decade opportunity to swing for the fences on behalf of the flying public. Unfortunately, they settled for a bunt single.”

NCL, in coalition with other consumer and passenger rights organizations, has called for stronger safeguards to be included in the FAA reauthorization bill for years. Last February, NCL and eight other advocacy groups sent a letter to House and Senate Commerce Committee leaders urging support for a range of critical reforms to the airline industry. Key among those demands was a change to allow state attorneys general to enforce consumer protection laws against airlines, something that federal law currently prohibits them from doing. Thirty-seven bipartisan state attorneys general have also supported this reform, which both the House of Representatives and the Senate have so far ignored in their bills.

“Congress is running out of time to get this right,” said Breyault. “We strongly urge members of the Senate to make protecting the flying public a bigger priority as this bill moves to a floor vote.”

Several of the passenger rights coalition’s other priorities were included in the bill reported out of the Senate Commerce Committee. These reforms include a requirement that children be seated with their family and caregivers without additional fees, a requirement that air travel vouchers not expire before five years, standards for refunds in the event of a delay or cancellation, minimum customer service call center requirements, and creating an assistant Secretary of Aviation Consumer Protection.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

Top Ten Scams report: Explosion of crypto reports raises alarm 

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February 6, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

WASHINGTON, D.C. — Cryptocurrency is being used in an increasing number of scams, leading to some of the highest median losses every reported to the National Consumers League (NCL). In its annual 2023 Top Ten Scams report, NCL found that the percentage of crypto-linked scam reports more than doubled year-over-year, making up almost 1-in-10 complaints received. The report, published annually, analyzed more than 2,700 consumer fraud complaints filed with NCL’s Fraud.org campaign last year.  

The median loss for reported investment frauds, including cryptocurrency, ballooned to $20,000. Just two years prior, the number was $1,750. The complaints in this category frequently described schemes where victims were encouraged to put money into cryptocurrencies and cryptocurrency-linked investments that later turned out to be fraudulent.  

“Year after year, complaints to Fraud.org paint a heartbreaking picture,” said NCL Vice President of Public Policy, Telecommunications, and Fraud John Breyault. “It is clear that the problem of fraud is not going away on its own. It is past time for policymakers at every level to take this issue seriously and do everything they can to crackdown on this epidemic.” 

A record year for natural disasters appears to have been reflected in the numbers as well: reports of fake charity scams were up almost 200% compared to 2022. These complaints often involve fraudsters impersonating non-profit aid groups, particularly following crises like the wildfires in Maui. 

The top ten scam categories reported to Fraud.org in 2023 were:  

  1. Prizes/Sweepstakes/Free Gifts  
  2. Internet: General Merchandise  
  3. Phishing/Spoofing  
  4. Investments: Other (incl. cryptocurrency) 
  5. Fake Check Scams 
  6. Advance Fee Loans, Credit Arrangers  
  7. Friendship & Sweetheart Swindles  
  8. Charitable Solicitations 
  9. Family/Friend Imposter  
  10. Home Repair 

“Reporting fraud is an important step for victims,” said NCL Consumer Services Coordinator James Perry. “When someone reaches out, we can connect them with the right resources and begin to walk them through the recovery process. The information they share also helps inform decisions around fighting these scams.” 

Scammers contacting victims through the internet and phone calls initiated three out of four fraud incidents, with the internet replacing phone calls as the number one method of contact in 2023. The Top Ten Scams report also showed a worrying trend in scams targeting young consumers. Compared to 2022, complaints from consumers aged 18-25 increased by 13.12%. 

“The prevalence of scams online should worry everyone, especially as more of daily life becomes virtual,” said NCL Public Policy Manager Eden Iscil. “This is particularly troubling for younger individuals who we know statistically are more likely to become victims of fraud than any other age group. As consumers now grow up online, this problem will only get worse if we don’t dedicate resources to safeguarding our most vulnerable.”  

To view the full 2023 Top Ten Scams report, click here.  

Methodology  

The National Consumers League Top Ten Scams report analyzed 2,756 complaints submitted by consumers to NCL’s Fraud.org campaign in 2023. This data is self-reported by victims and should not be considered a nationally representative sample. NCL shares complaint data with a network of law enforcement and consumer protection agency partners who combine it with other data sets to identify trends in fraud and build cases. 

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL testifies before Senate, urges stronger protections against scams

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February 1, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Highlighting the ongoing epidemic of fraud across the country, NCL Vice President of Public Policy, Telecommunications and Fraud John Breyault testified today before the Senate Committee on Banking, Housing, and Urban Affairs. Breyault advocated for stronger consumer protections alongside Carla Sanchez-Adams, a senior attorney at the National Consumer Law Center.

“When NCL last testified before this committee in 2021, we warned that peer-to-peer payment platforms such as Zelle, Venmo, Cash App, and PayPal had become ‘payment methods of choice for scammers.’ Unfortunately, the problem has only worsened since then,” Breyault told the committee. “No amount of consumer education, better disclosure, or ‘friction’ put into payment flows will solve this problem alone. The payment platforms where fraud occurs must have a bigger financial incentive to stop scams before they happen.”

The Federal Trade Commission, the primary federal agency for reporting fraud, continues to receive record numbers of complaints, with 5.4 million reports in 2022. Since the last time Vice President Breyault appeared before the Senate Banking Committee, median losses to scams nearly doubled, from $374 per incident to $650. The emergence of new and unregulated technologies, such as peer-to-peer payment apps and cryptocurrencies, has also facilitated staggering losses. Crypto-linked fraud losses exceeded $1 billion annually in 2022 and 2023.

“We are not winning the fight against fraud,” said Breyault. “We need Congress to Act.”

Breyault urged the Banking Committee to swiftly pass bills like the Protecting Consumers From Payment Scams Act and Senator Elizabeth Warrens (D-MA) Digital Asset Anti-Money Laundering Act of 2023 to crack down on scams targeting peer-to-peer payment apps and cryptocurrencies, respectively.

This was Breyault’s fourth time speaking before Congress on policy solutions to address the incessant scams targeting Americans daily. Breyault’s full written testimony can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL applauds competition regulators for centering consumers and workers in 2023 Merger Guidelines

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December 19, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

This week, the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) released their final merger guidelines, describing how the agencies will review mergers and acquisitions. The agencies improved upon existing guidelines by recentering marketplace competition and federal antitrust law, a break from previous enforcement regimes that allowed waves of consolidation to occur economy-wide with few repercussions.

“The 2023 Merger Guidelines mark a historic return toward these agencies’ original mandates—to protect the public from predatory corporations,” said National Consumers League Chief Executive Officer Sally Greenberg. “Decades of rubber-stamping harmful deals have allowed anti-consumer and anti-worker practices to run wild. NCL welcomes the updated guidelines and appreciates that the Commission and Department have signaled an intention to examine proposed deals holistically. Strong enforcement of our antitrust laws is key to combatting price gouging, privacy violations, wage suppression, and other noxious practices.”

NCL strongly supports the application of antitrust laws to protect consumers, workers, and our democracy. NCL’s comments to the DOJ and FTC on the 2023 Merger Guidelines can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

National Consumers League supports table saw safety standard proposed by the Consumer Product Safety Commission

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December 8, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – The National Consumers League (NCL) submitted comments to the Consumer Product Safety Commission (CPSC) this week on the Commission’s proposed rule to require a safety standard for all table saws. The “Safety Standard Addressing Blade-Contact Injuries on Table Saws” proposal is projected to prevent more injuries and save more money than any rule ever proposed at the agency.

“NCL applauds the CPSC for moving toward a final rule to make table saws safe and to prevent the over 50,000 injuries – many of them finger amputations – that occur each year from table saw accidents,” said NCL CEO Sally Greenberg.

Pam Gilbert, NCL Board member and former Executive Director of the CPSC noted, “The matter of table saw safety has been an ongoing concern of the CPSC and National Consumers League for more than a decade; we believe this rule would finally bring much-needed safety technology to this ubiquitous woodshop tool found in millions of US households.”

Previous voluntary standards have been ineffective in preventing injuries, thus the need for this mandatory safety standard using proven effective technology that prevents serious injuries from table saws. Indeed, a 15-year trend analysis (from 2004 to 2018) of table saw injuries showed no reduction in table saw injuries from 2010 to 2018, despite the fact that a voluntary standard that became effective in 2010 required new table saws to be equipped with modular blade guard systems.

The Commission expects that the proposed rule would prevent or mitigate an estimated 49,176 injuries treated in hospital emergency departments or other medical settings per year and that net cost benefits, even when factoring the cost of the technology, would range from $1.28 billion to $2.32 billion per year.

The proposed rule would limit the depth of cut of a table saw to 3.5 mm or less when a test probe, acting as surrogate for a human finger or other body part, contacts the spinning blade at an approach rate of 1 m/s. CPSC staff estimated that the proposed rule would prevent or mitigate the severity of 54,800 medically treated blade-contact injuries annually.

To read the views of woodworkers themselves, this YouTube link tells first-hand accounts, some of which have been included in NCL’s comments. One is below:

“My father cut all four of his fingers off with a Radial arm saw years ago. Three fingers are bolted back together so he can only move them at the knuckle, the index finger was lost due to infection. He had to have a skin graft on all his fingers pulled from his thigh, so they now all grow hair so he has to shave them otherwise they grow hair. In airports, he always sets off the metal detectors. When I was looking at table saws about 8 years ago it was between the sawstop contractor (hybrid wasn’t out yet) and Powermatic 3hp cabinet. My father was with me at the time while I was a teenager at woodcraft. One look at his hand and it was obvious which saw I walked out with. 8 years later I still use the Sawstop contractor saw and it looks just like when I bought it, Its a fantastic investment and probably the only one that is relatively easy to justify to your wife. “

As Commissioner Rich Trumka, himself a woodworker, observed in his comments “…[t]he rule would provide the greatest net benefit to society of any rule in the agency’s history that I’m aware of—up to a $2.32 billion net benefit every year.”

The National Consumers League fully supports this Proposed Rule and greatly appreciates the years of dedication and work from the CPSC’s engineers, statisticians, and economists and the leadership of CPSC Chair Alex Hoehn Saric in moving this to the top of the Commission’s agenda.

NCL’s comments can be found here.

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL applauds House Commerce Committee approval of consumer protection bills

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December 6, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

WASHINGTON, D.C. – The National Consumers League (NCL), America’s oldest consumer advocacy organization, today applauded the House Commerce Committee for advancing five important consumer protection bills that would implement long-sought reforms to the live event ticketing industry, require all-in pricing in short-term lodging, crack down on online dating scams and protect consumers’ plumbing systems from “flushable” cleaning wipes.

Two bills, the TICKET Act (H.R. 3950) and the Speculative Ticketing Oversight and Prohibition Act of 2023 (STOP Act), would implement much-needed reforms in the live event ticketing industry. The TICKET Act would prohibit hidden event ticket fees by requiring sellers to display the full price—including all mandatory charges—at the beginning of the transaction and in advertising. The STOP Act would prohibit the sale of tickets that the seller does not actually possess, a controversial practice known as speculative ticketing. The bill would also crack down on deceptive “white label” ticket resale websites and require fans to be provided refunds promptly in the event that a concert is canceled or postponed.

“Live event fans achieved an important victory with today’s vote,” said NCL Vice President of Public Policy, Telecommunications, and Fraud John Breyault. “Add-on junk fees for concerts and sporting events have been the bane of consumers’ existence for decades. These reforms are long overdue and promise to make the ticket-buying experience a fairer, easier process for millions of fans.”

Additionally, the committee advanced H.R. 6543, the No Hidden Fees on Extra Expenses for Stays Act; H.R. 2964, the Wastewater Infrastructure Pollution Prevention and Environmental Safety (WIPPES) Act; and H.R. 6125, the Online Dating Safety Act of 2023.

H.R. 6543 would require all-in pricing of hotel, Airbnb, and other short-term lodgings. This will prevent unscrupulous lodging companies from advertising one price to consumers only to hit them with additional fees later. The WIPPES Act will require that disposable cleaning wipes be clearly labeled with a “Do Not Flush” label. This has the potential to reduce estimated $441 million in additional operating costs that U.S. clean water utilities incur due to the flushing of so-called “flushable” cleaning wipes. Finally, the Online Dating Safety Act would require dating websites and apps to proactively notify users that an account they messaged has been banned. Such notifications would do much to intervene in ongoing frauds and likely help to reduce the scourge of romance scams.

“By advancing these bills, the House is demonstrating that consumer protection is a bipartisan issue. We urge the full House approval for these measures,” said Breyault. “Undisclosed hotel resort junk fees have bedeviled travelers for too long, draining consumers’ travel budgets and harming honest hotel operators. Similarly, the damage from ‘flushable’ wipes harms all consumers since the costs to municipal water systems are passed along to all ratepayers. Finally romance scam victims lost $1.3 billion to fraudsters last year. Requiring dating websites to offer them more support will do much to reduce the scourge of these scams.”

The committee’s actions come after NCL testified in support of these bills in a House legislative hearing in September of this year.

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL comments on Proposed Rule – Fish and Shellfish; Canned Tuna Standard of Identity and Standard of Fill of Container

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November 21, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

The National Consumers League recently submitted comments regarding the Proposed Rule, “Fish and Shellfish; Canned Tuna Standard of Identity and Standard of Fill of Container.” We believe that the Proposed Rule, when implemented, will modernize the standard of identity for “canned tuna,” 21 C.F.R. § 161.190 (“canned tuna SOI”), to require an accurate measure and declaration of weight, and to allow for “safe and suitable” ingredients to provide manufacturers with the flexibility to keep up with changing consumer tastes.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL comments regarding Proposed Rule: Medication Guides: Patient Medication Information Docket No. FDA-2019-N-5959

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November 21, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

The National Consumers League recently submitted comments regarding the Proposed Rule, Medication Guides: Patient Medication Information, that we believe will greatly improve the information patients receive with their prescription medicines.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL applauds CPSC’s vote on a historic table saw safety rule that could save up to $2.32 billion and prevent 50,000 grave table saw injuries each year

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October 20, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – The National Consumers League applauds the Consumer Product Safety Commission’s (CPSC) 3-1 vote on October 18, 2023, to move forward towards a mandatory safety standard for electric table saws, which cause 50,000 partial or full amputations each year and cost the health care system upwards of $2.3 billion a year.

“We thank Chairman Alex Hoehn Saric for his leadership and Commissioners Richard Trumka Jr. and Mary Boyle for their support,” said NCL’s CEO Sally Greenberg. “NCL has been working to get requirements for safer table saw designs since 2008. This is a very welcome development for a product that is so ubiquitous in American homes, while at the same time posing such a grave danger of injury. Over 20 years, table saws have injured one million people.”

NCL Board member and former Executive Director of the CPSC, Pamela Gilbert, noted that this vote is long overdue. “The technology to almost entirely do away with serious injuries from table saws has been available for over two decades. Members of the power tool industry, sadly, have resisted safer designs despite many opportunities to do so,” said Gilbert. “The delay has led to hundreds of thousands of permanent, debilitating injuries that could have been prevented. It’s time for the industry to step up and do the right thing for their customers.”

NCL noted that Commissioner Trumka is seeking information from leadership at seven power tool companies, including SawStop, which already incorporates Active Injury Mitigation to prevent serious table saw injuries, as called for in the proposed rule. He seeks their views on a faster implementation period than the 3 years called for in the proposed rule. Responses to his letter are due on November 15, 2023, and will prove interesting and instructive.

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.