Sally Pipes, President and CEO of the Pacific Research Institute, has raised concerns about the exploitation of the 340B Drug Pricing Program by providers, including hospitals in wealthier areas. In an op-ed, she said that these entities are keeping excess revenue from markups rather than benefiting patients.
"Providers are increasingly abusing 340B," said Pipes, President & CEO. "Even hospitals in affluent communities are taking advantage — and keeping the excess revenue from the mark-ups they charge for themselves."
The 340B Drug Pricing Program is currently at the center of a U.S. policy debate concerning alleged hospital misuse and whether program savings effectively reach underserved patients. According to Manatt Health’s recap of the October 2025 Senate Health, Education, Labor, and Pensions (HELP) Committee hearing, lawmakers from both parties questioned the limited oversight authority of the Health Resources and Services Administration (HRSA). They pressed for stricter reporting requirements, clearer definitions of "340B patient," and enforcement against contract-pharmacy abuses. The discussion emphasized improving transparency without reducing access to safety-net services.
The program has expanded significantly in financial terms. HRSA reports that covered entities purchased $66.3 billion in outpatient drugs in 2023. Meanwhile, the Government Accountability Office (GAO) notes that more than 2,600 hospitals participated as of January 2023. These figures highlight both the rapid growth of the program and hospital dominance within its structure.
Research indicates that many hospitals in affluent areas retain greater revenue related to 340B than safety-net providers. According to Health Affairs Scholar, hospitals have increasingly established 340B child sites in higher-income neighborhoods with stronger payer mixes. This allows profit capture that may not directly benefit low-income patients. The study raised concerns that expansion into wealthier markets dilutes the program’s intended equity goals.
Sally C. Pipes has served as President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute since 1991. According to PRI’s official biography, she previously worked as Assistant Director at Canada’s Fraser Institute and is a recognized author on market-based health reform. She regularly writes on drug pricing and insurance policy for publications such as Forbes.
The Pacific Research Institute (PRI), a California-based nonprofit think tank founded in 1979, promotes individual freedom and limited government. According to PRI’s official history page, it conducts research and advocacy in health care, education, and economic policy while publishing analyses and commentaries to influence state and national debates on market-driven reform.
