Robert Zirkelbach, Chief Public Affairs Officer and Head of Strategic Initiatives at the Pharmaceutical Research and Manufacturers of America (PhRMA), has raised concerns about certain urban hospitals exploiting a loophole in the 340B Drug Pricing Program. According to Zirkelbach, these hospitals are using a rural-designation loophole to divert resources from underserved patients. His statement was made on the social media platform X.
"A new piece from Modern Healthcare exposes how big, tax-exempt hospitals in urban areas are using a loophole to qualify as ‘rural' to exploit the 340B program—cashing in on discounts meant for providers treating underserved patients," said Zirkelbach, Chief Public Affairs Officer & Head of Strategic Initiatives. "This practice diverts resources away from those who truly need help. Congress must fix the 340B program and stop the abuse."
The 340B Drug Pricing Program, established in 1992, is administered by the Health Resources and Services Administration (HRSA). It aims to help eligible healthcare providers stretch limited federal resources to serve vulnerable populations. Covered entities such as hospitals and health centers can purchase outpatient drugs at discounted prices, with savings intended to expand access to care for low-income and uninsured patients.
According to a 2024 study published in the National Library of Medicine, the number of 340B contract pharmacy arrangements increased significantly from 1,300 in 2010 to over 60,000 by 2022. The research highlighted limited evidence that patients directly benefit from these arrangements, raising transparency concerns regarding how financial gains are distributed among participating entities.
A 2023 analysis by former Congressional Budget Office Director Dan Crippen estimated that the 340B program reduces state and federal tax revenues by up to $17 billion annually. Of this amount, $3.5 billion is lost at the state and local level, with the remainder affecting federal revenue. Crippen also valued total 340B drug discounts at approximately $70 billion in 2023.
Zirkelbach has more than two decades of public affairs experience and currently leads PhRMA’s strategic communications, media, and advocacy initiatives. Since April 2023, he has overseen campaigns on policy and industry priorities for the U.S. biopharmaceutical sector. His past roles include senior positions at ExxonMobil, America's Health Insurance Plans (AHIP), and as Press Secretary to Congressman Jim Nussle.
