12/17/2025
I remember when the 340B program was introduced, I was a resident at the time. What began with good intent, has transformed into a program that does not help those it was established to assist. Sadly, it has turned into a slush fund that does not lower the cost of drugs, or increase access, for the poor and medically underserved.
When a safety-net program becomes a hospital cash machine | Guest column
Richmond-Times Dispatch by Justin Leventhal
12.17.25
The 340B Drug Pricing Program was originally intended to help low-income and uninsured patients afford medicine. It was created to replace the discounts and free medicines that manufacturers provided to hospitals before the 1990s. However, since its inception, it has grown — with little transparency — from a targeted program for those in need into a cash grab for hospitals. Without enforced reporting requirements and a clear focus on directing savings to the intended beneficiaries, the 340B program will remain corporate welfare for wealthy hospital systems.
The most significant shift in the program came in 2010 when HRSA issued guidance allowing hospitals to contract with multiple pharmacies under the program. Previously, they were limited to just one. This change triggered a rapid expansion, and today nearly 60% of all pharmacies in America participate in the program. Notably, the program has never required participating hospitals to provide discounted care. As a result, many offer no additional care to vulnerable patients when compared to hospitals not participating in the 340B program. Hospitals are also not required to pass any savings on to patients, which has fueled their expansion into affluent markets where they can buy discounted drugs and sell them at full price.
Fixing this program is straightforward — if Congress has the political will. First, hospitals should be required to report who receives 340B-discounted drugs and how the savings are being used. Without basic accountability, there is no incentive to ensure the program serves patients. At a minimum, hospitals should disclose how much of the discount is passed to patients and how much they retain. Second, Congress should mandate that 340B savings be passed through to each patient receiving 340B-discounted drugs. While some administrative costs are reasonable, the lion’s share of the savings should be used to make unaffordable medicines affordable — not inflate hospital margins. Third, eligibility requirements must be updated.
Affiliated satellite locations in high-income areas should be restricted, while rural hospitals should be given a clearer path to participate. The simplest solution: count uninsured patients when determining eligibility. They are the most vulnerable and often in the most need of assistance, not to mention one of the groups the 340B program was created to help. Including them in the DSH status should have been part of the program from the beginning.
The 340B program is no longer focused on serving the vulnerable — it now subsidizes hospital systems skilled at exploiting its flaws. What began as a safety net has become poorly regulated corporate welfare, with little obligation to pass savings on to patients. Without enforceable reporting, modernized eligibility rules and a mandate to deliver benefits to those in need, 340B will continue to divert public money for private gain. Congress has the tools to fix this; what’s missing is the will to put patients first.
Fix 340B now.
Senator Chuck Schumer Congressman Hakeem Jeffries Rep. Elise Stefanik U.S. Rep. Nicole Malliotakis Rep. Claudia Tenney Rep. Andrew Garbarino Congressman Nick LaLota Rep. Tom Suozzi Rep. Laura Gillen
