Adam J. Fein, president of the Drug Channels Institute, expressed concerns about the 340B Drug Pricing Program, describing it as "structurally flawed and vulnerable to abuse by for-profit interests." Fein shared these views in a statement posted on X.
"Strong new explainer from USC Schaeffer on the out-of-control 340B Drug Pricing Program," said J. Fein. "Subsidies tied to spread (not patient need) Uninsured and low-income patients often miss the discounts. A growing share of 340B dollars are captured by for-profit pharmacies and PBMs."
The USC Schaeffer Center's 2025 report outlines that the 340B Drug Pricing Program has "misaligned incentives" that divert funds away from intended safety-net care. The report suggests that hospitals are profiting from price spreads and discounts often fail to reach uninsured or low-income patients, which is contrary to the program's original purpose. It also warns that these dynamics create perverse incentives for hospitals to expand contract pharmacy arrangements rather than improve access for vulnerable populations.
According to the Drug Channels Institute, total purchases under the 340B program exceeded $66 billion in 2023, a significant increase from under $4 billion in 2007. This growth reflects what critics describe as unchecked expansion without oversight. The report further notes that the number of participating covered entities and contract pharmacies has grown sharply, far outpacing the increase in uninsured patients. This suggests that financial incentives rather than patient need are driving participation.
A 2024 analysis by PhRMA found that for-profit pharmacies have made billions through the 340B program while offering limited measurable benefit to patients. The report highlights that contract pharmacies retained large margins on discounted drugs and often failed to share savings with those most in need. It concluded that the 340B program has become an additional profit stream for retail chains and Pharmacy Benefit Managers (PBMs), instead of a targeted tool for patient affordability and access.
Fein has served as President of Drug Channels Institute since March 2012, focusing on pharmaceutical economics and supply chain analysis. In January 2024, Drug Channels Institute was acquired by HMP Global, expanding its influence in healthcare insights and education. Fein continues to lead the organization from its headquarters in Philadelphia, Pennsylvania, regularly publishing industry reports on drug distribution and policy reform.
