Congress should therefore require standardized reporting on 340B revenues and how hospitals use them. Clearer eligibility standards and meaningful charity-care requirements for hospital-affiliated outpatient facilities would help ensure the program serves patients rather than simply enriching providers.
Congress established 340B in 1992 to help safety-net hospitals and clinics stretch their resources. The program requires drug manufacturers to sell outpatient medicines at substantial discounts to eligible facilities, which can bill insurers at higher rates and retain the difference.
Participating institutions are expected to use these benefits to expand access to care for low-income and uninsured patients. Yet federal law generally doesn’t require hospitals to document how they spend the money.
That omission has become harder to overlook as the program has expanded. According to Drug Channels, discounted 340B drug purchases have skyrocketed from roughly $5 billion in 2010 to $100 billion in 2025 — a nearly 20-fold increase in just 15 years. The estimated difference between those drugs’ list prices and what providers actually paid after discounts reached $79.5 billion last year.
Whether those enormous financial benefits translate into additional assistance for vulnerable patients is another question.
A new study from the Pioneer Institute and CancerCare raises serious doubts. Examining data from nearly 4,000 hospitals, researchers found that 340B hospitals devoted an average of 2.16% of operating expenses to charity care. Hospitals outside the program devoted 2.82%.
These findings raise an uncomfortable question for 340B hospitals. Are they using the savings federal law requires drugmakers to provide to help vulnerable patients — or to boost their bottom lines and finance acquisitions of competing providers?
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.
A $100 Billion Drug Discount Program Is Finally Facing New Scrutiny
Sally C. Pipes
Congress should therefore require standardized reporting on 340B revenues and how hospitals use them. Clearer eligibility standards and meaningful charity-care requirements for hospital-affiliated outpatient facilities would help ensure the program serves patients rather than simply enriching providers.
Congress established 340B in 1992 to help safety-net hospitals and clinics stretch their resources. The program requires drug manufacturers to sell outpatient medicines at substantial discounts to eligible facilities, which can bill insurers at higher rates and retain the difference.
Participating institutions are expected to use these benefits to expand access to care for low-income and uninsured patients. Yet federal law generally doesn’t require hospitals to document how they spend the money.
That omission has become harder to overlook as the program has expanded. According to Drug Channels, discounted 340B drug purchases have skyrocketed from roughly $5 billion in 2010 to $100 billion in 2025 — a nearly 20-fold increase in just 15 years. The estimated difference between those drugs’ list prices and what providers actually paid after discounts reached $79.5 billion last year.
Whether those enormous financial benefits translate into additional assistance for vulnerable patients is another question.
A new study from the Pioneer Institute and CancerCare raises serious doubts. Examining data from nearly 4,000 hospitals, researchers found that 340B hospitals devoted an average of 2.16% of operating expenses to charity care. Hospitals outside the program devoted 2.82%.
These findings raise an uncomfortable question for 340B hospitals. Are they using the savings federal law requires drugmakers to provide to help vulnerable patients — or to boost their bottom lines and finance acquisitions of competing providers?
Read the entire op-ed here.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.