The Taxpayers Protection Alliance recently announced on X that the 340B Drug Pricing Program is contributing to increased taxpayer costs and urged Congress to take action to restore the program's integrity.
According to the Congressional Budget Office (CBO), spending on 340B drugs rose from $6.6 billion in 2010 to $43.9 billion in 2021, reflecting an average growth of 19% per year. This rate of increase has far exceeded overall prescription drug spending growth, highlighting the rapid expansion of the program. The CBO also concluded that the structure of 340B reduces manufacturer rebates and shifts more costs onto federal healthcare programs, thereby increasing taxpayer burdens.
Johnson & Johnson’s Policy Research group reported that much of the financial benefit of the 340B program is captured by large hospital systems, contract pharmacies, and pharmacy benefit managers instead of low-income patients. The report noted "widespread abuse and misuse" and emphasized that charity care provided by hospitals has declined even as their participation in 340B has surged. The analysis highlighted that without transparency requirements, it is nearly impossible to ensure that program discounts actually reach vulnerable patients.
According to PhRMA, state and federal taxpayers lose an estimated $6.5 billion annually due to lost Medicaid rebates linked to 340B billing practices. The group explained that drugs obtained at 340B discounts can be excluded from rebate mechanisms, depriving states and the federal government of expected savings. This dynamic has added strain to Medicaid budgets and shifted costs back to taxpayers.
The Taxpayers Protection Alliance is a nonprofit advocacy group focused on fiscal responsibility, limited government, and transparency in public spending. It produces reports, commentary, and campaigns on issues such as healthcare, taxation, and government regulation. The group's mission is to protect taxpayers by exposing waste, fraud, and abuse while advancing accountability in federal and state programs.
