244 Billion Reasons Why Congress Must Restore Accountability to 340B

Created by Congress in 1992, the 340B drug pricing program has ballooned into a massive government-created behemoth benefiting (often well-off) hospitals to the tune of $244 billion annually. This failed program operates with virtually zero transparency, leaving taxpayers and consumers to foot the bill for an accountability-free revenue stream flowing to a network of well-heeled institutions. It’s time to reform the 340B program and restore some much-needed transparency and accountability.

What was originally intended as a small and focused safety net to help low-income and vulnerable patients access affordable medications has transformed into a lucrative cash cow for massive hospital systems and entity pharmacies. Recent data highlight the staggering scale of this expansion: in 2025, 340B covered entities received $244.3 billion in total payments from payers and patients—a 125 percent surge over the $108.4 billion reimbursed in 2021. In 2025, hospitals, clinics, and their private partners generated $142 billion in gross profits simply by marking up discounted 340B medicines.

Worse yet, there is little to no evidence that these massive discounts are being passed along to the vulnerable patients the program was designed to help.

The 340B program continues to operate unmoored from accountability, leaving taxpayers and insured Americans to shoulder the hidden costs. With few meaningful guardrails or statutory reporting requirements, large tax-exempt health systems buy drugs at steep government-mandated discounts and sell them at full price, pocketing the difference as an unrestricted windfall.

This lack of oversight creates a breeding ground for systemic arbitrage.  Large hospital systems use 340B revenues to buy up independent physician practices, artificially consolidate regional markets, and shift care into higher-cost hospital settings. Research consistently shows that as a hospital’s 340B revenue rises, its provision of charity care and community benefits often stagnates or declines. While there is certainly nothing wrong with hospitals or healthcare providers expanding or consolidating in response to market forces, doing so in response to a flawed government program distorts the healthcare system and leaves millions of patients worse off.

Fortunately, policymakers are starting to take notice and experimenting with reforms. For example, the Health Resources and Services Administration (HRSA) recently allowed a limited manufacturer pilot program to utilize a rebate-based rapid verification model. Instead of an opaque upfront discount system that invites double-dipping and tracking errors, a rebate model provides a clear and detailed receipt, allowing for verification that a drug actually went to a qualified 340B patient before the discount is finalized. The pilot initiative is a positive first step in ensuring that this government program serves the people it was meant to serve.

Now is the time for Congress to build on this pilot program and bring meaningful financial accountability to the 340B program. A rebate model offers a commonsense path to protect taxpayers and ensure safety-net resources reach the patients who need them most. Congress should make reform an urgent priority by enacting legislation that codifies these changes and clearly defines who qualifies as a patient. With the 119th Congress ending, the stakes are too high for further delay. Pro-patient and pro-accountability 340B legislation can help ensure participating providers use resources as intended and that eligible low-income and uninsured patients benefit. It’s time for lawmakers to address the program’s many problems and turn the page on this sorry chapter.