Adam J. Fein, President of Drug Channels Institute, shared detailed concerns about the 340B Drug Pricing Program’s design, calling it structurally flawed and vulnerable to abuse by for-profit interests in New York. The statement was made on X.
‘Strong new explainer from USC Schaeffer on the out-of-control 340B Drug Pricing Program,’ said Fein. ‘Subsidies tied to spread (not patient need), Uninsured and low-income patients often miss the discounts, A growing share of 340B dollars are captured by for-profit pharmacies and PBMs’.
The USC Schaeffer Center’s 2025 report outlines that the 340B Drug Pricing Program has “misaligned incentives” that divert funds away from intended safety-net care, with hospitals profiting from price spreads and discounts often failing to reach the uninsured or low-income patients the program was designed to help. The report also warns that these dynamics create perverse incentives for hospitals to expand contract pharmacy arrangements rather than improve access for vulnerable populations.
According to Drug Channels Institute, total purchases under the 340B program exceeded $66 billion in 2023, a dramatic increase from under $4 billion in 2007, reflecting what critics describe as unchecked expansion without oversight. The report further notes that the number of participating covered entities and contract pharmacies has grown sharply, far outpacing the increase in uninsured patients, indicating that financial incentives rather than patient need are driving participation.
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.
Adam Fein has served as President of Drug Channels Institute since March 2012, where he focuses on pharmaceutical economics and supply chain analysis. In January 2024, Drug Channels Institute was acquired by HMP Global, a move that expanded the institute’s influence in the healthcare insights and education sector. Fein continues to lead the organization from its headquarters in Philadelphia, Pennsylvania, and regularly publishes industry reports on drug distribution and policy reform.
