STAT+: How a drug discount program intended to benefit the poor got entangled in a California rent-control fight

WASHINGTON — Californians are about to vote on an aggressive policy proposals to reform a drug discount program that is a key source of revenue for hospitals and health clinics. The group behind it? Apartment builders. 

As a general rule, programs named after the sub-section of the law in which they were created are not well-known. The 340B Drug Discount Program is no exception. 

But obscure is not the same as trivial. The 340B program is a major source of money for nonprofit hospitals and health clinics that treat high volumes of low-income patients. Discounts from 340B are not publicly disclosed, but the Government Accountability Office estimated them at 20% to 50% of drug prices, and some estimates are even higher. Health care providers charge insurers full market prices for those drugs and keep the difference. There are no restrictions on how they spend the profits.  

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