Michelle Nyman, Deputy Vice President of Advocacy & Strategic Alliances at the Pharmaceutical Research & Manufacturers of America (PhRMA), said that among hospitals enrolled in the 340B Drug Pricing Program, over 80% of beds categorized as rural are actually located in urban hospitals. The statement was made on X.
"Among hospitals enrolled in the 340B Drug Pricing Program, over 80% of all ‘rural' hospital beds were actually in urban hospitals making billions of dollars in profits," said Nyman.
The 340B Drug Pricing Program, established by Congress in 1992 and administered by the Health Resources and Services Administration (HRSA), enables eligible healthcare providers to purchase outpatient drugs at significantly reduced prices. These savings are intended to help hospitals stretch limited federal resources with the goal of improving access to care for low-income and uninsured patients.
According to a report from Becker’s Hospital Review, urban hospitals are increasingly classified as rural facilities, allowing them to access funds and benefits originally designed to support remote communities. This shift has led to hundreds of urban hospitals reaping financial advantages despite being located in metropolitan areas. By 2023, these hospitals controlled a majority of beds designated as rural, raising concerns about equity in healthcare funding.
According to a PhRMA blog highlighting recent research, large urban hospitals have increasingly exploited the 340B Drug Pricing Program by securing dual rural classifications. From 2017 to 2023, the number of urban hospitals classified as both urban and rural surged from just three to more than 425, covering over 162,000 beds. These beds now represent 61 percent of all rural-classified beds, demonstrating how big-city hospitals capture benefits intended for smaller rural facilities.
Nyman is the Deputy Vice President of Alliances & Public Affairs at PhRMA. She leads engagement with health stakeholders to promote access, innovation, and public policy reforms. Her professional background includes strategic roles in advocacy, health communications, and biopharmaceutical policy.
