The billion-dollar boom no one’s tracking. The massive federal drug program most have never heard of, 340B, is now $81.4 billion in size as of 2024, according to new data from the Health Resources & Services Administration (HRSA). The program, which is the second largest federal drug program and on track to be the largest by 2027, saw an increase in spending of more than 20% compared to 2023.
The 340B program, which costs taxpayers billions each year, is rapidly growing due to large, tax-exempt hospitals exploiting the program for profit with no evidence patients are benefitting.
Where’s the money going? Big tax-exempt hospitals can exploit the 340B program by buying medicines at a steep discount, sometimes as little as a penny, and marking them up, by thousands of dollars or more. Because there are no guardrails on how hospitals and clinics use 340B profits, the money often isn’t going to help low-income and uninsured patients afford medicines. So, despite substantial growth in the program, there has not been a corresponding increase in access and affordability of medicines for vulnerable patients.
- The program provides nearly $65 billion in oversight free revenue to big tax-exempt hospitals.
- There’s no evidence that this growth correlates to better care or cheaper medications for patients. Instead, the 340B program places a growing burden on taxpayers, employers, and patients.
Taxpayers foot the bill. While big hospitals quietly exploit the 340B program for profit, resulting in massive program growth, it is patients, taxpayers and employers that pay the price.
- Higher costs for taxpayers. According to a recent Berkeley Research Group report, the program costs taxpayers $20 billion a year due to lost Medicaid and Medicare rebates.
- Patients aren’t benefiting. Despite all this spending, a nonpartisan Congressional Budget Office report found no evidence that patients are benefiting from the program.
- No oversight. An analysis from ADVI found that the federal government routinely neglects to provide oversight of the program, with only 0.3% of providers receiving any HRSA review each year.
Bottom line: Increased 340B spending isn’t improving patient access or affordability. It’s time to take action to prevent waste, fraud and abuse in the health care system and fix the 340B program. Learn more at PhRMA.org/340B.
Molly Jenkins
Molly Jenkins is a senior director of Public Affairs at PhRMA, where she leads communications on the 340B hospital markup program. Before joining PhRMA, she led issue advocacy and reputation campaigns at Purple Strategies. She also worked on Capitol Hill in serval different capacities, including leading communications for Rep. Greg Walden and as press secretary for the Energy and Commerce Committee. Molly has an M.A. in Health Communication and Media Relations from Johns Hopkins University and a B.A. in journalism from Texas Christian University.
Molly Jenkins