Reid Porter, senior director of state public affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA), said that the 340B program and Pharmacy Benefit Managers (PBMs) increase drug costs without benefiting patients. He urged reforms to address the role of intermediaries in medicine spending. The statement was made on the PhRMA Blog.
"State and federal investigations have shown 340B is often exploited for profit, yet some states have passed laws attempting to protect these practices from oversight," said Porter. "For-profit third-party administrators and pharmacies that contract with hospitals are also making huge amounts off the program. Only in the U.S. do entities that do not make brand medicines—like PBMs, insurers and the 340B program—receive half of every dollar spent on them. Zero evidence 340B markups support underserved patients."
According to Axios, debates over 340B reform and PBM oversight intensified in 2025 as states advanced restrictions and Congress considered transparency measures. Arkansas enacted the nation’s first ban on PBM ownership of pharmacies, leading to litigation and positioning the state as a test case. Federal policymakers have expressed concerns over contract pharmacy practices and pricing power within the supply chain.
PhRMA estimates that hospital markups under the 340B program add nearly $65 billion annually to brand-drug spending, shifting costs to patients, employers, and taxpayers. The organization also calculates that state and federal Medicaid programs lose about $6.5 billion a year in rebates due to these markups, prompting calls for reform.
The Federal Trade Commission (FTC) found that the three largest PBMs generated more than $7.3 billion between 2017 and 2022 by inflating prices on specialty generics dispensed through affiliated pharmacies. These profits, significantly higher than those of other supply chain entities, have intensified scrutiny of vertically integrated PBM-pharmacy models and strengthened arguments for tighter oversight, as reported by the Wall Street Journal.
Porter is responsible for leading policy engagement on issues such as PBM regulation and 340B reform at PhRMA. With experience in public affairs and communications, he focuses on building relationships with state policymakers and stakeholders to advance industry positions on affordability and access.
PhRMA, founded in 1958, is a Washington, D.C.–based trade association representing leading U.S. biopharmaceutical research companies. Its mission is to advance medical innovation, protect patient access to medicines, and advocate for market-based health policies. In 2025, its priorities include addressing PBM transparency, 340B reform, and opposing drug price controls.
