The Pharmaceutical Research and Manufacturers of America (PhRMA) reported on April 25 that Minnesota’s 340B data raises concerns about how hospitals are using revenue generated through the federal drug discount program, pointing to what it described as a gap between program earnings and uncompensated care.
The statement comes amid increased scrutiny of the 340B Drug Pricing Program, which allows eligible hospitals and clinics to purchase outpatient drugs at discounted prices to support care for vulnerable populations.
“Minnesota’s own data shows the problem with the 340B hospital markup program: Hospitals made $1.3B+ in 340B profits—nearly $1B more than they spent on uncompensated care. If patients aren’t benefiting, where is the money going? Transparency and accountability are long overdue," the group stated on X.
Minnesota became the first state to require annual financial reporting from providers participating in the 340B program, creating a publicly available view of net revenue, payer mix and participation across covered entities. The Minnesota Department of Health said the reporting initiative was designed to improve transparency in a program that previously lacked consistent public financial disclosure.
According to the state report, Minnesota covered entities generated at least $1.34 billion in net 340B revenue in calendar year 2024, more than double the $630 million reported in 2023. The state said the figure is likely understated due to challenges capturing office-administered drugs such as infusions and injectables. The largest 340B hospitals accounted for more than $1 billion in net revenue, representing over 80% of the statewide total. Overall, 340B reimbursements reached $3.04 billion, with acquisition costs of $1.53 billion and operational costs of about $165 million.
Drug Channels reported that total purchases through the 340B program reached $44 billion in 2021, up from $9 billion in 2014, reflecting rapid national growth of the program across hospitals and clinics. The publication also noted there is no federal requirement that 340B savings be passed directly to patients.
PhRMA represents biopharmaceutical research companies and frequently advocates on drug pricing policy, including oversight of the 340B program. The organization has argued that some tax-exempt hospitals and clinics can purchase discounted medicines, receive higher reimbursements and retain the difference without a requirement to pass savings directly to patients.
