Citizens Against Government Waste said weak oversight and an undefined patient eligibility standard have let the 340B drug discount program drift from its original mission, allowing covered hospitals to generate substantial profit.
According to Citizens Against Government Waste on X, "The 340B Drug Discount Program started in 1992 to help hospitals that serve uninsured populations cover the costs of drugs and provide discounts to patients. But the lack of a clear definition of eligible patients and poor oversight allowed program drift. Covered hospitals now generate millions of dollars of profit in what has become the 2nd-largest federal prescription drug program behind Medicare Part D."
340B purchases nationwide totaled $100 billion in 2025, marking the first time the figure surpassed this threshold and representing a 23 percent increase from $81.4 billion in 2024, according to the Health Resources and Services Administration. Disproportionate share hospitals accounted for most purchases, while high-cost specialty drugs made up just over a third of units but nearly two-thirds of total spending.
The program has grown significantly since 2010, with Citizens Against Government Waste urging Congress since 2014 to define eligible patients, verify eligibility at prescription fill, and improve transparency, according to the group. Between 2013 and 2023, the number of covered entity sites more than doubled. The Government Accountability Office reported that as of November 2025, only five out of twenty recommendations for improving oversight had been implemented by HRSA.
Citizens Against Government Waste is a private nonprofit organization founded in 1984 that works to eliminate waste, fraud, abuse, and mismanagement at all levels of government through research and public education, according to the group.
