Rich hospitals have been gaming a discount drug program for the poor

See A Good Idea to Cut Drug Costs. WSJ editorial. Excerpts:

"The 340B program" was supposed "to help hospitals that disproportionately serve Medicaid and low-income patients. Such hospitals are allowed to buy outpatient drugs at steeply discounted rates, on average about 45% of a drug’s list price."

"Hospitals then charge insurers and Medicare a large mark-up on the drugs when their pharmacies administer them to patients, pocketing the difference. Spending in the program has surged 11-fold since 2010 and exceeds Medicaid pharmaceutical spending."

"ObamaCare’s Medicaid expansion . . . made more hospitals eligible."

"2,700 hospitals now qualify for discounts, up from 45 in 1992."

"These include . . . well-off hospitals"

This "has encouraged consolidation among providers since outpatient clinics and physicians owned by eligible hospitals benefit from discounts."

"doctors employed by 340B hospitals are also more likely to prescribe higher-priced drugs."

"hospitals and their pharmacy partners reap bigger discounts on them than they do on generics"

" a hospital can also claim the discounts for drugs administered to former patients"

"a third of the discount dollars are directed to hospitals’ financial portfolios"

"The discounts have also given hospitals more money to acquire physician practices. Such consolidation has increased prices and insurance premiums."

"hospital prices have increased 88% over the last 15 years"

"To offset the growing hospital discounts, drug makers raise prices."