Sally Pipes, President and CEO of the Pacific Research Institute, said the 340B program has strayed from its original mission, allowing wealthy hospitals to profit while offering little charity care, a concern drawing attention in New York. The announcement was made on X.
The federal 340B Drug Pricing Program, created in 1992, requires drug manufacturers to offer steep discounts to eligible hospitals and clinics that serve low-income or uninsured patients. According to the Association of American Medical Colleges (AAMC), these savings are intended to help safety-net providers stretch resources and expand access to essential medications, though oversight gaps have raised concerns about uneven benefits.
A New York Times investigation in 2022 found that many non-profit hospitals across the U.S., including those benefiting from the 340B program, billed poor patients who were eligible for free or discounted care and devoted minimal spending to charity care. Some large systems spent less than 2% of their expenses on helping low-income patients, despite receiving tax breaks and federal program benefits.
PhRMA reported that in New York, 113 hospitals are enrolled in the 340B program, holding upwards of 6,000 pharmacy contracts nationwide. Yet only 24% of these pharmacies are in medically underserved areas, and 86% of hospitals provide below-average charity care, fueling concerns that the program may not be effectively reaching its intended recipients.
Sally C. Pipes has served as President and CEO of the Pacific Research Institute since 1991, where she leads research and advocacy on healthcare, education, and economic policy. A prominent voice for free-market healthcare reform, she promotes patient-centered solutions that expand access and affordability. Pipes is also a regular columnist for Forbes and National Review, writing extensively on policy innovation and government reform.
