Jack Kalavritinos, founder of JK Strategies and the Washington Health Innovation Council, has expressed concerns about the 340B program, suggesting it requires reform as it currently benefits institutions and intermediaries more than patients. This statement was made in an op-ed.
"a new government program, buoyed by intentions so noble that no one can argue against it, is derailed by loopholes, allowing clever stakeholders to thwart its purpose and use it to enrich themselves," said Kalavritinos. "Because the program lacked safeguards, however, health care conglomerates were allowed to game the system by taking advantage of lax oversight and turning 340B into a cash cow, a way for the unscrupulous to line their pockets on a monumental scale. tax-exempt hospitals and clinics were buying discounted medications, often for pennies on the dollar, before turning around and charging patients the full price or more. Still, one thing was clear: The money was not going to the people who needed it."
In April 2025, Senate Health, Education, Labor and Pensions (HELP) Chair Bill Cassidy released a report following a lengthy investigation into the 340B program. According to the report, the program lacks transparency and many covered entities generate significant revenue from 340B drugs without clear evidence that patients benefit proportionally. The report called for congressional reforms to realign incentives and strengthen oversight across hospitals and contract pharmacies.
The Congressional Budget Office (CBO) reported in 2025 that purchases of 340B-priced drugs surged from $6.6 billion in 2010 to approximately $44 billion by 2021—far outpacing overall drug-spending growth. The CBO highlighted budget implications due to the program's expansion and raised concerns that current rules enable arbitrage, with discounts captured by institutions and intermediaries rather than consistently lowering patients’ out-of-pocket costs.
Analyses of the 340B contract pharmacy market in 2025 indicate that large chains and their affiliated Pharmacy Benefit Managers (PBMs) are tightening control over the market. According to industry tracking, this has made 340B a growing profit center for retail pharmacies and PBMs. There is a noted rapid proliferation of contract pharmacy arrangements and spread-capture opportunities when discounted drugs are reimbursed at higher rates, which dilutes patient benefits relative to institutional and PBM gains.
Kalavritinos is a public affairs and health policy strategist who founded JK Strategies. He has served in senior roles at the Department of Health & Human Services (HHS) and Food & Drug Administration (FDA), including Director of Intergovernmental & External Affairs at HHS and Associate Commissioner for External Affairs at FDA. His background includes private-sector leadership and coalition building, reflecting over two decades advancing health innovation and patient-focused policy.
