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
Our President Christopher Sheeron joined other free market leaders 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