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U.S.|How a Company Makes Millions Off a Hospital Program Meant to Help the Poor
https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html
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A private business has helped supercharge a controversial federal drug program. Patients and insurers have been left with big bills.
Jan. 15, 2025, 5:00 a.m. ET
Soon after being diagnosed with metastatic breast cancer, Virginia King sat in an outpatient clinic in Santa Fe, N.M, while a nurse injected her with a powerful drug to slow damage to her spine, where the disease had spread.
Even though the drug had a list price of about $2,700, the hospital that owned the cancer center billed Mrs. King’s insurance company $22,700. Her insurer paid $10,000, but the hospital wanted more.
She got a bill for over $2,500 — “more than half my take-home salary for a month,” said Mrs. King, 65.
She had unknowingly sought care from a hospital that participates in a federal program allowing it to buy drugs at a steep discount and charge patients and insurers a higher amount, keeping the difference.
The intention behind the program was for a small number of safety-net providers to have access to affordable drugs and be able to expand their care for needy patients. But instead, the program has exploded: Now, more than half of nonprofit hospitals in the United States take part. While some providers say it has helped keep their doors open, others — especially large nonprofit health systems — have been accused of maximizing payouts and swallowing the profits.
The program’s escalation has driven up health care costs for employers, patients and taxpayers, studies show.
