The American Consumer Institute announced on X that some hospitals are exploiting the 340B Drug Pricing Program for profit rather than using it to serve vulnerable patients.
The 340B Drug Pricing Program was established in 1992 to enable certain healthcare providers to purchase outpatient drugs at reduced prices. These savings are intended to support care for low-income and uninsured patients. The program is managed by the Health Resources and Services Administration.
According to the U.S. Government Accountability Office (GAO), covered entities purchased approximately $6.1 billion in 340B drugs in 2018. Despite the scale of the program, the GAO reported limited information on how those savings were applied by providers. The agency recommended enhanced oversight to ensure the program meets its intended purpose.
A study published in Health Affairs found that many 340B contract pharmacy arrangements in 2019 involved for-profit pharmacies that retained a large share of the profit margin between drug acquisition and reimbursement. The research indicated that these profits often did not flow back to safety-net providers, concluding that current arrangements may reduce the program’s effectiveness in serving vulnerable patients.
The American Consumer Institute is a nonprofit educational and research organization based in Washington, D.C. Its mission is to promote consumer welfare by improving public understanding of the impacts of public policies and regulations. The institute publishes policy analyses, economic studies, and consumer surveys on a wide range of issues affecting U.S. consumers.
