Stephen J. Ubl, CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), said that hospitals are exploiting the 340B program to significantly increase drug costs. The statement was made on X.
"Big hospitals are abusing the 340B program to markup medicine prices by as much as 1000% or more," said J. Ubl. "When they do, patients pay the price. We're highlighting how this abuse is driving up costs for patients, taxpayers and employers. It's time to fix the 340B hospital markup program."
The 340B Drug Pricing Program, enacted in 1992 through the Veterans Health Care Act, mandates pharmaceutical manufacturers to provide outpatient drugs at reduced prices to eligible healthcare providers. This initiative aims to help those serving low-income and uninsured patients by stretching federal resources and expanding services for vulnerable populations.
According to a 2025 Senate Health, Education, Labor, and Pensions (HELP) Committee investigation, Bon Secours Richmond Community Hospital and Cleveland Clinic generated substantial revenue from the 340B program. They achieved this by purchasing drugs at steep discounts and reselling them at marked-up prices without transparent mechanisms to pass savings onto patients or clearly account for how proceeds are used for patient benefit.
Critics argue that abuses of the 340B program distort outpatient pharmacy spending by imposing a hidden surcharge on patients and payers. Data indicate that these markups can significantly elevate costs, with no requirement for revenue reinvestment in care. Instead, hospitals may channel funds into general revenue or capital improvements rather than direct patient benefit.
Ubl has served as President and CEO of PhRMA since 2015, leading advocacy efforts on public policy for the U.S. biopharmaceutical industry. He previously held the position of President and CEO of AdvaMed, the world's largest medical technology association, where he focused on shaping policy and representing members on healthcare innovation and regulation.
