"The program was established in 1992 to help safety net providers stretch federal resources and better serve vulnerable populations by allowing eligible hospitals and clinics to purchase outpatient drugs at steeply discounted prices. However, disputes over the program's money flow, oversight and misuse have fueled decades of conflict among providers, pharmaceutical manufacturers and lawmakers. Some argue that 340B is a lifeline for struggling hospitals and clinics,"
"There is also tension around the program's opacity - hospitals aren't required to show how they use 340B savings, which further leads critics to question whether those discounts truly benefit patients. Under 340B, hospitals can buy discounted drugs and then bill insurers at the full rate. Pharmaceutical companies accuse hospitals of keeping the difference as profit, with no legal requirement to pass along savings to patients."
Established in 1992, the 340B Drug Pricing Program allows eligible hospitals and clinics to purchase outpatient drugs at heavily discounted prices to support vulnerable populations. The program has grown to include large, well-capitalized health systems such as Ascension, CommonSpirit Health, Geisinger, Penn Medicine and Providence. Hospitals are not required to disclose how they use 340B savings, enabling billing of insurers at full rates while retaining the difference. Pharmaceutical manufacturers allege that providers keep discounts as profit without legally passing savings to patients. Data show billions in drugs flow through 340B, contributing substantially to national drug spending and exceeding Medicare Part B and Medicaid values.
Read at MedCity News
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