The Intersection of Drugmakers Restricting 340B Pharmacy Sales and the Crisis of Mentally Ill Inmates in Jails

Ben H.

Hatched by Ben H.

Aug 25, 2023

3 min read


The Intersection of Drugmakers Restricting 340B Pharmacy Sales and the Crisis of Mentally Ill Inmates in Jails


The healthcare system in the United States is grappling with multiple challenges, ranging from the profitability of pharmacy benefit managers (PBMs) to the increasing number of mentally ill inmates in jails. This article aims to explore the common points between these two issues and shed light on the underlying problems. Additionally, we will provide actionable advice on how to address these challenges effectively.

The Impact of Drugmakers Restricting 340B Pharmacy Sales:

The 340B drug discount program, established by Congress in 1992, was designed to provide hospitals caring for low-income and uninsured patients with significant drug discounts. However, drugmakers limiting discounted prescription sales to certain participating pharmacies within the program pose a threat to the profits of PBMs. PBMs profit from the program by directing patients to pharmacies owned by the same parent company and charging referral and dispensing fees to providers. This restriction not only undermines the intended purpose of the 340B program but also puts pressure on the largest pharmacy benefit managers.

The Crisis of Mentally Ill Inmates in Jails:

A concerning trend has emerged in the United States, where the number of mentally ill inmates in jails has reached alarming levels. The Wall Street Journal analysis of state data reveals that psychiatric hospitals are overwhelmed with mentally ill individuals, leading to a backlog of inmates awaiting court-ordered treatment. These inmates, who are not yet convicted and unable to stand trial, languish in jail without the necessary care and support for their mental health conditions. This inefficient system raises questions about responsibility and the incentive structure within the private market.

The Intersection of the Issues:

While seemingly unrelated, the issues of drugmakers restricting 340B pharmacy sales and the crisis of mentally ill inmates in jails share common underlying problems within the healthcare system. One key concern is the scarcity of behavioral health services and workers, which has reached critical levels. The lack of resources exacerbates both the profitability concerns of PBMs and the inadequate mental health support for inmates.

Actionable Advice:

  • 1. Increase Funding and Resources: It is crucial to allocate additional funds and resources to expand behavioral health services and facilities. This will help address the scarcity of services and workers, ensuring that individuals with mental health conditions receive the care they need.
  • 2. Improve Collaboration and Coordination: Enhancing collaboration between drugmakers, PBMs, hospitals, and pharmacies participating in the 340B program can lead to a more efficient and effective system. By aligning incentives and working together, these stakeholders can ensure the program's intended purpose is fulfilled while maintaining profitability.
  • 3. Implement Comprehensive Mental Health Reforms: Policymakers should prioritize comprehensive mental health reforms that focus on early intervention, community-based care, and diversion programs. By investing in preventive measures and alternatives to incarceration, the number of mentally ill inmates in jails can be reduced, alleviating the strain on both the criminal justice system and psychiatric hospitals.


The challenges posed by drugmakers restricting 340B pharmacy sales and the crisis of mentally ill inmates in jails highlight the need for a comprehensive approach to healthcare reform. By addressing the scarcity of resources, improving collaboration and coordination among stakeholders, and implementing comprehensive mental health reforms, we can work towards a system that prioritizes the well-being of all individuals and ensures the effective and efficient delivery of healthcare services.

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