The American Consumer Institute announced on X that some hospitals are exploiting the 340B Drug Pricing Program for profit rather than using it to serve vulnerable patients.
The 340B Drug Pricing Program was established by Congress in 1992 to help eligible hospitals, clinics, and health centers stretch limited federal resources by purchasing outpatient drugs at significantly reduced prices. The intent was to allow covered entities to use the savings to improve access to care for low-income, uninsured, and otherwise vulnerable patients. The program is administered by the Health Resources and Services Administration (HRSA) and has grown substantially over the past three decades, raising increasing concerns about oversight and accountability.
A 2021 report by the U.S. Government Accountability Office found that covered entities purchased about $6.1 billion in 340B drugs in 2018, yet provided little information on how savings were used. The GAO noted that this lack of transparency makes it difficult to assess whether the program benefits low-income or uninsured patients as intended, and recommended stronger federal oversight.
PhRMA reported that in New York, 113 hospitals participate in the 340B program, holding over 6,000 contracts with pharmacies nationwide. However, only 24% of these contract pharmacies are located in medically underserved areas, and 86% of participating hospitals provide below-average levels of charity care. This disparity has raised concerns about the program’s effectiveness in reaching its intended beneficiaries within the state.
The American Consumer Institute is a nonprofit educational and research organization based in Washington, D.C. Its mission is to promote consumer welfare by advancing public understanding of how government policies, regulations, and market dynamics affect everyday Americans. The Institute conducts and publishes policy analyses, economic studies, and consumer-focused research across a wide range of issues, including healthcare, technology, telecommunications, and energy. Through its work, ACI seeks to inform both policymakers and the public, advocating for transparent, efficient, and pro-consumer outcomes in legislative and regulatory processes.
