Sally Pipes, president and CEO of the Pacific Research Institute, said on May 8 that some hospitals participating in the federal 340B Drug Pricing Program purchase discounted drugs and resell them at large markups.
“Many 340B hospitals buy discounted drugs and resell them at markups exceeding 10x their acquisition cost. Patients don’t see the savings. Hospitals pocket the profits while employers, taxpayers, and workers pay higher healthcare costs,” Pipes said in a social media post.
The 340B Drug Pricing Program was created to help safety-net providers stretch limited federal resources and expand care for low-income and vulnerable patients. Eligible participants include community health centers, Ryan White HIV/AIDS clinics, disproportionate share hospitals, children’s hospitals, and other safety-net providers, according to the Health Resources & Services Administration.
Pipes’ comments come amid ongoing scrutiny of the program’s oversight and expansion. The number of covered entity sites more than doubled between 2013 and 2023. While the Health Resources & Services Administration conducts annual audits of roughly 200 covered entities, government watchdog reports have noted that many recommendations remain unimplemented and oversight gaps persist, including concerns around duplicate discounts and eligibility compliance, according to the U.S. Government Accountability Office.
At an October 2025 Senate Health, Education, Labor & Pensions Committee hearing, Chairman Bill Cassidy said that the program had "ballooned with limited oversight," raising questions about how revenue is used and whether it directly benefits low-income patients. Cassidy also linked program growth to higher health care costs and cited concerns involving contract pharmacies, hospital consolidation, duplicate discounts, and transparency requirements.
Pipes leads Pacific Research Institute, a San Francisco-based think tank founded in 1979 that focuses on advancing free-market policy solutions. The organization describes its goal as championing freedom and personal responsibility through policy advocacy.
