Anthony DiGiorgio, DO, MHA, a neurosurgeon at San Francisco Medical Center, has raised concerns about the 340B drug pricing program. He said that hospitals are using the program as a revenue stream rather than to benefit poor or uninsured patients and called for reform. This statement was made on X.
"Everyone says 340B is a lifeline for the poor. But when you actually look at the data, a very different story emerges," said DiGiorgio, DO, MHA. "Hospitals buy up outpatient sites, slap a 340B label on them, and watch the revenue roll in. The original 340B intent was to support access for the poor and uninsured. Now, hospitals are using it as a revenue stream, with very little oversight or requirement to show benefit to low-income patients. Right now, 340B is helping institutions game the system, not helping patients get meds they couldn't otherwise afford."
According to the U.S. Government Accountability Office, the 340B Drug Pricing Program was established by Congress in 1992 to help safety-net hospitals and clinics stretch federal resources by allowing them to buy outpatient drugs at discounted prices, thereby improving access for low-income and uninsured patients. Critics have noted that the program has expanded beyond its original scope, with hospitals using contract pharmacies and acquiring outpatient sites to increase revenue without clear requirements to direct savings to vulnerable populations. Recent government reports have called for more transparency, as current rules do not require hospitals to pass drug discounts to patients or report how savings support the poor.
A 2021 analysis by the Health Resources and Services Administration Office of Inspector General found that many 340B hospitals do not provide drug discounts directly to low-income, uninsured patients at the pharmacy counter. From 2005 to 2018, hospitals increased their share of 340B drug purchases from 10% to 80%, largely through registering new affiliated outpatient sites. Much of the financial benefit from this growth accrues to hospitals, with limited evidence of reduced drug costs or expanded access for the most vulnerable patients.
Studies published in peer-reviewed journals have shown that many 340B hospitals provide less charity care as a percentage of their operating costs than non-340B hospitals. Research in The New England Journal of Medicine found that between 2004 and 2014, hospitals participating in 340B experienced higher rates of outpatient site acquisition and increased drug spending. However, these changes were not correlated with a proportional increase in services to low-income patients, raising questions about the alignment between program intent and actual outcomes. The lack of robust reporting requirements makes it difficult for policymakers or the public to assess whether 340B revenue is being used as intended.
DiGiorgio is a neurosurgeon, health policy researcher, and advocate for healthcare reform with a focus on improving efficiency and patient outcomes in the U.S. healthcare system. He currently serves as an Assistant Professor of Neurological Surgery at the University of California, San Francisco (UCSF), where his work includes research on hospital policy, payment reform, and access to care for vulnerable populations. DiGiorgio regularly publishes and speaks on health policy topics, including the impacts of hospital financial strategies on care for underserved patients.
