Sally Greenberg, CEO of the National Consumers League (NCL), said the federal 340B drug discount program, initially intended to assist low-income patients, has become a “financial bonanza for non-profit hospitals.”
At least 27 New Jersey hospitals participate in 340b, according to 340bHealth.
“Created with the best intentions, the 340B Drug Pricing Program was designed to help low-income and uninsured patients access their medications,” wrote Greenberg in an op-ed in Real Clear Health. “Only $1 is invested in charity care for every $10 in profit collected by profitable 340B hospitals. Congress must act now to restore 340B to its original mission, ensuring it helps the low-income and vulnerable patients it was designed to serve.”
According to the U.S. Government Accountability Office (GAO), the Health Resources and Services Administration (HRSA) lacks sufficient oversight to ensure that hospitals participating in the 340B Program meet eligibility requirements. The GAO found that HRSA primarily depends on hospitals’ self-attestations without adequately verifying required contracts with state or local governments. This oversight allows ineligible hospitals to benefit from the program.
Tech Target reports that Pharmacy Benefit Managers (PBMs) have come under increased scrutiny for exploiting the 340B Drug Pricing Program by redirecting savings meant for vulnerable patients to boost their own profits. It is estimated that PBM-owned or affiliated pharmacies retained approximately $2.58 billion in 340B discounts in 2022, funds originally intended to aid low-income and uninsured patients. The Community Oncology Alliance’s findings indicate a deviation from the program’s original intent as these entities prioritize profit over patient care, undermining the safety net that 340B was designed to provide.
A report by the Minnesota Department of Health in 2024 revealed that in 2023, entities covered by the 340B program in Minnesota generated at least $630 million in net revenue from it. Notably, the state’s largest 340B hospitals, representing only 13% of reporting entities, accounted for approximately 80% more than $500 million of this revenue. The report also highlighted that payments to contract pharmacies and third-party administrators exceeded $120 million, raising concerns about whether the program’s benefits are reaching the intended low-income patient populations.
Greenberg has been leading NCL since 2007, advocating for consumer and worker rights. Before joining NCL, she held positions such as Senior Product Safety Counsel at Consumers Union and Eastern States Civil Rights Counsel for the Anti-Defamation League. She has testified before Congress on issues including drug safety, fraud, and data privacy, and serves on boards like the Fair Labor Association and the Alliance for a Stronger FDA.
