Ross Marchand, executive director of the Taxpayers Protection Alliance, said taxpayers are "picking up the tab" for the 340B drug discount program's many failures and mission creep.
"Taxpayers are picking up the tab for the program's many failures and mission creep," Marchand wrote in an op-ed for The Center Square.
Created in 1992, the 340B program requires pharmaceutical manufacturers to sell prescription drugs at steep discounts to qualifying hospitals and clinics, with the idea that safety net providers would stretch those savings to serve uninsured and low-income patients, Marchand wrote. Rather than those providers, large hospital systems already supported by taxpayer dollars have become the program's biggest winners. Congress anticipated roughly 90 hospitals would participate when it launched; more than 2,600 do today.
Annual 340B drug purchases surged from $6.6 billion in 2010 to more than $81 billion in 2024, a more than twelvefold increase that has made 340B the second largest federal prescription drug program behind Medicare Part D, according to Marchand's op-ed, which called for greater transparency into how covered hospitals actually spend the savings.
The program's purchases climbed further to $100 billion in 2025, up 22.8% from the year before, with a compound annual growth rate of 22.1% since 2010. The gap between list prices and discounted prices under the program—the money retained by covered entities—reached $79.5 billion in 2025, according to Drug Channels.
The Taxpayers Protection Alliance is a nonpartisan, nonprofit organization dedicated to educating the public on government's effects on the economy through research, analysis and investigative reporting, according to its website. Washington D.C.-based Taxpayers Protection Alliance Foundation is a nonprofit organization that advocates for government transparency through educating the public through research, investigative reporting, and analysis about excessive taxation and spending by all levels of government.
