Stephen J. Ubl, president and CEO of PhRMA, said on May 14 that the 340B Drug Pricing Program is being exploited by tax-exempt hospitals and clinics and that patients are not seeing the intended benefits.
“It’s become increasingly clear that the 340B program is being exploited by tax-exempt hospitals and clinics and that patients are not benefiting. A new WSJ editorial raised questions over how hospitals are exploiting the program, with ‘some of the wealthiest hospitals in the U.S. qualifying’ without a requirement that patients benefit,” Ubl said on social media.
A recent Wall Street Journal editorial cited a North Dakota federal court ruling involving Judge Daniel Traynor, which questioned whether the program’s structure allows hospitals to receive 340B discounts without a direct requirement that patients benefit. The ruling permanently blocked North Dakota’s 340B law after finding it interfered with federal drug pricing rules.
Ubl's comments come as scrutiny continues over whether the 340B program is delivering its original purpose of supporting low-income and uninsured patients. The program was designed to help safety-net providers stretch limited resources, but concerns have been raised about transparency, rapid growth, contract pharmacy expansion, and whether savings consistently reach patients, according to JAMA Health Forum.
Federal oversight of the program has also faced criticism. The U.S. Government Accountability Office has found that audits do not fully verify protections against duplicate discounts, may not ensure full correction of noncompliance, and do not guarantee that only eligible entities participate, raising concerns tied to diversion, Medicaid rebates, and eligibility requirements.
At an October 2025 Senate Health, Education, Labor & Pensions Committee hearing, Chairman Bill Cassidy said the program had "ballooned with limited oversight," raising questions about revenue use and direct benefits for low-income patients. Cassidy also pointed out issues related to contract pharmacies, hospital consolidation, duplicate discounts, and weak transparency requirements.
Stephen Ubl is President and CEO of PhRMA and has led the organization for more than a decade. PhRMA announced in April 2026 that Ubl plans to transition from the role after the longest CEO tenure in the association’s history, with his leadership including work on patient access, PBM policy, insurance practices, and 340B program growth.
