RealClear Health: DOGE-style 340B Report Can Jumpstart Reforms
By Kasia Mulligan, Patients Come First’s National Spokesperson
When Congress created the 340B Drug Pricing Program more than 30 years ago, its goal was clear: to help hospitals better serve low-income patients, not turn healthcare into a profit center. But as a report from the Senate Committee on Health, Education, Labor & Pensions, led by U.S. Senator Bill Cassidy (R-LA), reveals, today’s 340B program has become a cash cow for large hospital systems and drug middlemen—leaving patients struggling to afford the medications they desperately need.
According to the report, major hospital systems like Bon Secours and the Cleveland Clinic have generated hundreds of millions of dollars in wealth from 340B discounts—without delivering clear benefits to patients. Instead of passing along savings on critical medications like Humira (arthritis treatment), Ocrevus (multiple sclerosis therapy), or Keytruda (cancer care), these hospitals pocketed the money as revenue, funneling it into capital improvements or acquiring more practices. They claim these upgrades serve the community. But for patients choosing between groceries and life-saving prescriptions, the hospitals' profits came at a devastating cost.
Sadly, this isn’t a new phenomenon. For decades, government audits have shown that more than a third of 340B participants failed to comply with program requirements. Not only that, a study published on NIH.gov demonstrated that, as far back as 2004, hospital-affiliated clinics that registered for 340B discounts were serving wealthier communities and areas with higher rates of health insurance coverage than those clinics who registered before 2004, indicating that new clinics weren’t helping vulnerable populations as much as enriching hospital systems.
As the saying goes: where there’s smoke, there’s fire. Pharmacy Benefit Managers (PBMs) are just as guilty, according to the report, which found they generated $1.6 billion in revenue from covered entities in nearly four years. By exploiting the program’s lack of transparency, the PBMs are able to steer patients toward their preferred pharmacies—often at higher costs—while pocketing dispensing fees and siphoning off 340B savings meant for patients. At the end of the chain, patients are left with little relief and mounting medical bills.
Yet, there is hope—and a roadmap. Federally Qualified Health Centers (FQHCs) and small rural clinics are honoring the program’s original mission, leveraging 340B discounts to offer patients truly affordable care. It begs the question: if some providers can act in good faith, why can’t they all?
Americans overwhelmingly support reform. Our latest survey shows that nearly 80 percent believe hospitals and providers should be required to pass along 100 percent of 340B savings directly to patients. A strong majority also supports Congressional action to increase transparency and ensure the program benefits patients—not hospital bottom lines.
Senator Cassidy’s recommendations to require more reporting on 340B revenue usage are a good start. However, real reform must go further. Congress should require that savings are passed directly to patients at the pharmacy counter—not buried in hospital spreadsheets.
President Trump’s recent executive order on healthcare pricing opens a window of opportunity. But it will be wasted without swift legislative action. Patients cannot afford a delay.
Read the full op-ed in RealClear Health here.