While the 340B Drug Pricing Program has taken center stage in Congress this past month, many of its “beneficiaries” are unaware that they are enrolled in one of the government’s biggest healthcare discount programs. All those patients know is that they aren’t actually benefiting from the program, but are actually incurring enormous costs for their prescription drugs. Originally created to provide steep discounts on life-saving medications to safety-net hospitals and clinics that care for low-income, uninsured, and rural patients, the 340B Program now largely benefits hospitals that are pocketing billions of dollars and charging some patients full price.
A January 2025 investigation by The New York Times uncovered how hospitals routinely exploit the 340B program to generate hundreds of millions of dollars in profits. In one case, a New Mexico hospital paid $2,700 for a cancer drug through 340B, then billed insurance $22,700. After the patient's insurance paid $10,000, the hospital sent that cancer patient to debt collection for an additional $2,500.
Let that sink in. A hospital profited off a federal program for the poor and still sent a cancer patient to collections.
This isn't charity care. It's exploitation.
At $66 billion per year, 340B is now the second-largest prescription drug program in America, behind only Medicare Part D. Since 2023, U.S. Senator Dr. Bill Cassidy has been investigating how covered entities use 340B revenue and its resulting impacts on patients.
Under his leadership, the U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee conducted a multi-year investigation into how hospitals, pharmacy benefit managers, and third-party administrators extract massive profits from a program intended to serve the poor.
The investigation uncovered billions in hospital profits, minimal patient benefits, and a program that's become healthcare's most lucrative loophole. Richmond Community Hospital (part of Bon Secours Mercy Health) brought in $276.5 million in 340B revenue from 2018 to 2023 without passing those savings on to their patients. Cleveland Clinic pulled in nearly $933.7 million over just three years — with no direct benefits to patients.
Those aren't isolated incidents. Across the nation, hospitals are turning taxpayer-funded discounts into executive bonuses, and other questionable expenditures, while patient struggle to afford their medications.
The problem extends beyond hospitals. Pharmacy Benefit Managers (PBMs), the powerful middlemen in the drug supply chain, have devised ways to siphon off 340B funds. CVS Health charges patients with insurance up to $85 in "dispensing fees" per prescription for 340B drugs. Patients without insurance? They pay just $15 for the exact same service.
Both CVS and Walgreens add "third-party administrative services fees" that generate hundreds of millions of dollars annually. An October 2020 report found contract pharmacies marked up 340B drugs by an average of 72% profit margin, compared to just 22% for regular medications.
This contract pharmacy expansion isn’t serving poor or rural communities. A JAMA Health Forum study found 340B pharmacy growth "concentrated in affluent communities" where hospitals can generate higher profits.
At Patients Rising, we believe healthcare must put patients first. That means demanding access, affordability, transparency, and accountability. The 340B Program currently fails on all counts.
It’s time for Congress to restore 340B’s promise. At the beginning of November, the U.S. Senate Health, Education, Labor, and Pensions Committee held a public hearing on the 340B Program. The committee should prioritize a simple solution: adding a clear, statutory definition of a 340B-eligible patient, guided by five common-sense principles:
- Establish clear financial eligibility criteria: 340B discounts must target low-income, uninsured, or underinsured patients who genuinely need assistance, aligning with other federal safety-net programs.
- Identify 340B patients at the point of dispensing, not through opaque, after-the-fact accounting maneuvers.
- Require an established, ongoing relationship between the patient and the 340B hospital providing care.
- Link the discount to a recent healthcare service (within the last 12 months) received by the patient from that hospital.
- Demand a clear connection between the prescription and the specific services rendered by the 340B hospital itself.
These essential patient definition reforms must be coupled with robust oversight. Patients deserve the right to know when they receive a 340B drug and the actual price their hospital paid for it.
The largest healthcare discount in America should benefit the patients it was created for. Congress must finally ensure it does.
Terry Wilcox is the co-founder and Chief Mission Officer at Patients Rising, a non-profit and nonpartisan patient advocacy organization.
