Golden State Today

The executive director of a California health care reform group said that the recently-passed Proposition 34 addresses the "longtime abuse of the federal 340b prescription drug program."  

"While the official vote won't be certified until next month, the results were clear enough to declare a victory for a California ballot initiative on health care, namely Proposition 34, an effort to make sure that drug sale revenue is used solely on health care," Julie Gill Shuffield, executive director of Patients Come First-California (PCF-CA), wrote in a Nov. 27 op-ed in Cal Matters. "Prop. 34 confronts the longtime abuse of the federal 340B prescription drug program and will hold bad actors accountable if providers don't spend 98% of their revenue on patients. California voters got it right."

The 340B drug pricing program was established in 1992 to aid uninsured or low-income patients by allowing covered entities such as hospitals and healthcare organizations to purchase medications for eligible patients at reduced costs. These savings were intended to be passed on to the patients. However, since its inception, there has been minimal oversight, resulting in hospitals and healthcare institutions retaining the savings instead of reducing costs for patients.

Established in 1992, the 340b program is facilitated by the Health Resources and Services Administration (HRSA) and enables eligible hospitals and healthcare organizations to purchase outpatient medications at significantly discounted prices. Hospitals participating in the program can use the savings to fund essential services and programs, such as free or low-cost medication assistance, expanded access to healthcare, and community outreach initiatives.

At least 174 California hospitals participate in 340b, according to 340bHealth, including Palomar Medical Center in Escondido, Scripps Mercy Hospital in San Diego, and UCSD Medical Center in San Diego.

Participating hospitals, however, “often extend their 340B discounts to clinics in well-off communities, where they can charge privately insured patients more than those on Medicaid,” reported the Wall Street Journal.

“In some cases, the program appears to be bolstering profits in well-off areas more than it is underwriting services in less-privileged neighborhoods,” said the Journal article.

Proposition 34 mandates that select providers allocate 98% of their revenues from the federal 340B program towards direct patient care.

Gill Sheffield has been executive director of PCF-CA since the organization's launch in March 2024. In addition to running her own firm, Sutter Buttes Advisors, Gill Sheffield also founded Power of 100 Sutter Buttes Basin, a charitable community women's group. She was named Woman of the Year by U.S. Rep. John Garamendi (D-Fairfield) in 2019. Gill Shuffield also previously worked as director of regulatory and government affairs at AES Corporation and in external affairs for California ISO.