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Episode 25 |Breaking Down the $80 Billion 340B Drug Program

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In this episode of Only Healthcare, host Randy Vogenberg welcomes William Sarraille, retired senior partner from Sidley Austin's healthcare practice and nationally recognized expert in US healthcare law. As both a legal authority and rare disease patient himself, Bill exposes how the 340B drug discount program has evolved from a modest safety net initiative into an $80 billion profit machine that enriches hospitals while burdening employers and devastating patients with medical debt.

With 30 years of experience representing all stakeholders in the 340B ecosystem, Bill reveals the shocking reality: what began as Congress fixing a "boo-boo" in Medicaid drug pricing has become the single largest driver of healthcare consolidation and price inflation, with hospitals charging employers 150-400% markups while providing charity care to only 2.15% of patients on average.


Key Topics Discussed:

  • The $148 Billion Profit Explosion and Market Manipulation - New peer-reviewed IQVIA research reveals 80-100% of 340B's explosive growth from $6 billion in 2010 to $148 billion today stems from hospital utilization manipulation, not drug price increases, with hospitals charging employers 150-400% markups on discounted drugs while using profits to consolidate markets and eliminate competition

  • Medical Debt Crisis Despite Massive Hospital Profits - 340B hospitals average only 2.15% charity care spending despite $80 billion in annual profits, with patients never informed about assistance programs, making 340B the largest contributor to medical bankruptcies in America while only 3-5% of contract pharmacy transactions provide patient assistance despite 32% of Americans being uninsured or underinsured

  • The Employer Cost-Shift Trap and Transparency Failures - How self-interested brokers mislead employers with "50% discount" offers that represent markdowns from astronomically inflated charges, while 80% of 340B entities generating the most profits operate in complete opacity with no reporting requirements, feeding more dollars into hospital consolidation machines that raise prices on all healthcare services

The episode reveals how a program designed to help indigent patients has become a massive wealth extraction mechanism that enriches tax-exempt hospitals while bankrupting the very patients it claims to serve.

🎧 Listen now: onlyhealthcarepodcast.com

Hosted by: Randy Vogenberg, PhD

Guest: William Sarraille, Retired Senior Partner, Sidley Austin Healthcare Practice

Chapters:

(00:00) Introduction

(04:00) Original 340B intent: fixing Medicaid pricing errors

(07:00) $148 billion profit explosion through utilization manipulation

(14:00) Medical debt crisis: 2.15% charity care despite massive profits

(20:00) Direct-to-consumer and transparency solutions

(24:00) How employers unknowingly feed the profit machine

(28:00) Medicare negotiation impacts on rare disease innovation

(37:00) Conclusion


Hosted by:

Michael Navin & Dr. Randy Vogenberg


For feedback or to suggest topics for future episodes, reach out to us at onlyhealthcarepodcast@gmail.com.


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Disclaimer:© 2025 Only Healthcare Podcast. All rights reserved.


This podcast and its content, including but not limited to audio recordings, images, and text, are the property of the Only Healthcare Podcast and are protected by international copyright laws. We appreciate all distribution and content sharing. Contact us at onlyhealthcarepodcast@gmail.com to access media kits, provide feedback, inquire about guest participation or to learn more. Thank you for listening!


Hosted by: Michael Navin & Randy Vogenberg, PhD


This Podcast is sponsored by:


Peek: Peek is reimagining access through innovation, technology, connectivity, and partnership. Peek offers a comprehensive and unique suite of solutions to help clients improve access and affordability for prescription drugs.


The Peek Meds Marketplace is one of Peek’s differentiated offerings that gives employers a revolutionary new approach to controlling runaway prescription costs for their employees by providing unprecedented transparency, simplicity - and cost savings. The Peek Meds Marketplace aggregates cash discount cards, manufacturer copay offset programs, and an employee’s insurance information to provide a holistic and personalized view of prescription price options. This easy-to-use platform offers a one-stop-shopping experience for prescription drugs.


Peek’s team has decades of experience in the pharmaceutical industry and offers various services to biopharma manufacturers, brokers, benefits consultants, third-party administrators, and employers. Visit peekmeds.com to learn more.


Institute for Integrated Health (IIH): Health care benefits, insurance coverage regulations, and doing business in the healthcare industry can be complicated. At IIH, Dr. Randy Vogenberg and his team understand these unique challenges and provides strategic guidance customized to every client. To help overcome your unique challenges, IIH delivers education, planning and advisory on market trends, and U.S. health care market intelligence. The firm’s decades of proven success are due to strategic collaboration with associates from the business, clinical, and scientific communities. https://iih-online.com/.



 
 
 
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