Senators Agree: 340B Is Broken and Must Be Reformed

The 340B program was created more than 30 years ago with an important mission: help safety-net providers stretch scarce resources and deliver affordable care to underserved patient populations.

An October hearing held by the U.S. Senate HELP Committee, titled “The 340B Program: Examining Its Growth and Impact on Patients,” delivered bipartisan calls for both preservation and reform. At first glance, those two goals may seem at odds with each other, but when it comes to 340B, reform may be what’s needed to preserve the program for the future.

Sen. Susan Collins (R-Maine) noted that 340B “made the difference between a positive operating margin and a negative operating margin” for hospitals in her state, underscoring the importance of the program in areas with limited resources.

However, as Chairman Bill Cassidy (R-La.) pointed out, 340B participation has “ballooned with limited oversight,” raising questions about whether savings are truly reaching patients as Congress envisioned when it was established. An expert witness at the hearing from the Congressional Budget Office backed that concern, reporting that 340B incentives encourage providers to prescribe higher-cost drugs, expand into wealthier areas, and drive up costs for insurers and, ultimately, taxpayers.

Similarly, Dr. William Feldman, a physician and health policy researcher who testified at the hearing, summed up the core problem: the program was designed for a very different health care landscape. Today, large hospital systems and contract pharmacies have learned to maximize 340B revenue streams, often without a requirement to pass discounts directly to patients. In fact, Feldman’s research found that only a tiny fraction of 340B pharmacy transactions actually reduced patients’ out-of-pocket costs — a finding that runs counter to the program’s original purpose.

As debates progress, the patients 340B was meant to support are still struggling. Alongside the consensus that reform should be a priority, the Health Resources and Services Administration, responsible for administering 340B, is launching a new rebate pilot project. Designed to replace upfront discounts with back-end rebates, the test aims to improve oversight, prevent duplicate discounts, and curb abuse. Though helpful, this step is little more than a band-aid. Administrative fixes alone aren’t enough. Given the scale, legislative reform is needed to create real accountability and ensure patients, not massive for-profit institutions, see true benefits.

The consensus from the Senate hearing is hard to ignore: 340B is not delivering on its promise. The program is outdated, open to abuse, and it often leaves patients behind.

The good news? 340B reform is on the table, and there’s bipartisan momentum. Real fixes could mean:

• Ensuring prescription drug savings for 340B patients.
• Lower-cost health care services at 340B care centers.
• Increased services in areas with scarce resources.
• Transparency into how 340B revenue is used.
• Stronger oversight and auditing powers for HRSA.
• Guardrails to ensure contract pharmacies and child sites serve disadvantaged areas.
• Limits on aggressive medical debt practices.

Broad agreement at the Congressional level is encouraging, and it sets up the essential groundwork for 340B reform centered on patient-first priorities. A modern 340B should ensure patients see benefits through lower costs and better access to care, as Congress initially intended. Patients deserve access to care. It’s time to make 340B work for them.