Scott LaGanga, Executive Vice President of State Advocacy at the Pharmaceutical Research and Manufacturers of America (PhRMA), has raised concerns about Michigan hospitals’ use of the 340B Drug Pricing Program. He said on X that these hospitals are billing $14 billion for drugs purchased at $4 billion, with markups reaching 800%.
“The 340B drug discount program is not working when Michigan hospitals are billing patients $14 billion for prescription drugs that only cost them $4 billion, inflating some prices as high as 800,” said LaGanga.
The 340B Drug Pricing Program was established by Congress in 1992 to enable eligible healthcare providers to purchase outpatient drugs at reduced prices. According to 340B Health, the program’s purpose is to help safety-net providers extend their limited resources to serve more patients, particularly those who are uninsured or have low incomes.
The Commonwealth Fund reports that critics have expressed concerns about insufficient oversight of the 340B program and the use of contract pharmacies not directly affiliated with eligible hospitals. The program has also been scrutinized regarding how financial savings are utilized and whether they benefit low-income patients as intended.
According to the Pioneer Institute, similar issues have been observed in states like Georgia. In Georgia, it was found that 60% of 340B contract pharmacies linked to top hospitals are located outside the state, with 43% operating in high-income neighborhoods. These findings mirror concerns about the program’s implementation in Michigan.
LaGanga serves as Executive Vice President of State Advocacy at PhRMA, where he oversees policy development and legislative strategy across all 50 states. He holds master’s degrees in public affairs and international business and has led national initiatives focused on access to medicines and state-level healthcare reform efforts.
