Jack Kalavritinos, founder of JK Strategies and the Washington Health Innovation Council, has expressed concerns about the 340B program, suggesting it requires reform as it currently benefits institutions and intermediaries more than patients — an issue garnering attention in New York. This statement was made in an op-ed.
“A new government program, buoyed by intentions so noble that no one can argue against it, is derailed by loopholes, allowing clever stakeholders to thwart its purpose and use it to enrich themselves,” said Kalavritinos. “Because the program lacked safeguards, however, health care conglomerates were allowed to game the system by taking advantage of lax oversight and turning 340B into a cash cow, a way for the unscrupulous to line their pockets on a monumental scale. Tax-exempt hospitals and clinics were buying discounted medications, often for pennies on the dollar, before turning around and charging patients the full price or more. Still, one thing was clear: The money was not going to the people who needed it.”
In April 2025, Senate Health, Education, Labor and Pensions (HELP) Chair Bill Cassidy released a report following a lengthy investigation into the 340B program. According to the report, the program lacks transparency, and many covered entities generate significant revenue from 340B drugs without clear evidence that patients benefit proportionally. The report called for congressional reforms to realign incentives and strengthen oversight across hospitals and contract pharmacies.
The Congressional Budget Office (CBO) reported in 2025 that purchases of 340B-priced drugs surged from $6.6 billion in 2010 to approximately $44 billion by 2021—far outpacing overall drug-spending growth. The CBO highlighted budget implications due to the program’s expansion and raised concerns that current rules enable arbitrage, with discounts captured by institutions and intermediaries rather than consistently lowering patients’ out-of-pocket costs.
In New York, 113 hospitals take part in 340B and manage more than 6,100 pharmacy contracts nationwide, but just 24% of those pharmacies are in medically underserved areas and 86% of 340B hospitals provide charity care below the national benchmark. New York Medicaid rules now require 340B-purchased drugs billed to Medicaid to be submitted at actual acquisition cost with explicit 340B designations, reflecting rising scrutiny over transparency and whether funds are truly easing prescription burdens for low-income residents.
Kalavritinos is a public affairs and health policy strategist who founded JK Strategies. He has served in senior roles at the Department of Health & Human Services (HHS) and Food & Drug Administration (FDA), including Director of Intergovernmental & External Affairs at HHS and Associate Commissioner for External Affairs at FDA. His background includes private-sector leadership and coalition building, reflecting over two decades advancing health innovation and patient-focused policy.
