340B
The 340B Drug Pricing Program is a U.S. federal government program enacted in 1992. 340B requires pharmaceutical manufacturers to provide outpatient drugs to eligible healthcare organizations—mostly hospitals—at significantly reduced prices. The program’s initial intent was to help safety-net hospitals provide discounted medications to low-income patients. That’s something everyone can support. However, over the past 25 years, 340B has been hijacked, morphing into an oversight-free revenue machine for tax-exempt hospitals, clinics, and their for-profit partners to charge patients whatever they want. Simply put, rich hospitals have been gaming this discount drug program for the poor. It’s time for significant 340B reform in Washington.
Insights
Today in PoliticsNY, our President Christopher Sheeron writes his latest op-ed. Sheeron dives into the 340B program with a particular emphasis on New York. He argues, “The choice for lawmakers is straightforward. They can either protect a broken and greedy system that drives up costs, or demand transparency to ensure 340B delivers savings to the patients it is meant to serve. The 340B program was created to make medications and treatments more affordable for patients in need. Instead, it functions as a massive revenue stream free of oversight for large hospital systems, rewarding mergers and market consolidation at the expense of patients and taxpayers.”
September 29, 2025
In a new post for AEIdeas entitled, “The 340B Debate”, the American Enterprise Institute’s James Capretta and Jack Rowing dive into the history of, and recent updates on, the 340B program. They argue, “An intervention that was supposed to ease cost pressures, [340B] instead is producing cascading unintended consequences that are likely raising overall costs.”
September 23, 2025
Today, the Wall Street Journal’s Editorial Board pens a terrific editorial advocating for 340B reform. The Board writes, “The 340B program is a classic example of a well-intended policy that has caused unintended harm. Congress established the program in 1992 to help hospitals that disproportionately serve Medicaid and low-income patients. Such hospitals are allowed to buy outpatient drugs at steeply discounted rates, on average about 45% of a drug’s list price. Hospitals then charge insurers and Medicare a large mark-up on the drugs when their pharmacies administer them to patients, pocketing the difference.”
September 21, 2025
Our President Christopher Sheeron joined other free market leaders this week for a coalition letter to House Speaker Mike Johnson and Senate Majority Leader John Thune on 340B fraud. According to POLITICO, "Roughly 40 conservative leaders, including Grover Norquist, who heads Americans for Tax Reform, are calling on Republican congressional leaders to crack down on the 340B drug-pricing program, which provides discounted prices for certain so-called safety-net providers to purchase outpatient drugs. ‘The 340B program is supposed to help hospitals provide care to indigent populations at low or no cost, but it is now routinely used fraudulently,' the leaders wrote in a letter. Hospitals serving low income areas receive the medicines at low or no cost, but then distribute them throughout a vast hospital network, specifically targeting affluent areas, and increasing the price for everyone.’”
July 16, 2025