Peter St Onge, an economist and research fellow at the Heritage Foundation, said the federal 340B Drug Pricing Program has been "hijacked" by tax-exempt hospitals and clinics that pocket billions in drug discounts while patients see little benefit.
According to St. Onge, "America First means patients first, not executives first. The 340B program has been hijacked by tax-exempt hospitals and clinics that pocket billions in drug discounts while patients see little benefit. No special treatment, no carve-outs. Make them prove the savings are reaching the people who need them."
A 2024 report found that 85 percent of disproportionate share hospitals earn more in 340B profit than they spend on charity care. In 2022 alone, those hospitals earned $44 billion in 340B profit but spent only $18 billion—just 42 percent of those profits—on charity care, according to the Alliance for Integrity and Reform of 340B.
Most hospitals in the 340B program are under no legal obligation to use their profits from the program to benefit patients. Disproportionate share hospitals bring in about 80 percent of total 340B revenue yet are not required to use those profits to benefit the patients they serve, according to Third Way.
Nationally, purchases through the program have grown from $5 billion in 2010 to $81.4 billion in 2024—a more than sixteen-fold increase driven largely by an expansion of eligible hospitals under the Affordable Care Act and a surge in contract pharmacy arrangements, which grew from a single pharmacy per hospital in 1995 to more than 32,000 by 2024, according to the Paragon Health Institute.
