Geo News
Community curated by people like you
LatestAICryptoHealthWorld AffairsUS Politics
340B drug program faces renewed scrutiny over hospital charity care spending and reform proposals
00

340B drug program faces renewed scrutiny over hospital charity care spending and reform proposals

Sep 25, 2026

The federal 340B drug discount program faces intense scrutiny as annual spending reached $100 billion in 2025. A September 2026 report by the Pioneer Institute and CancerCare alleges participating hospitals lag behind non-340B peers in charity care, prompting pushback from the American Hospital Association. Meanwhile, lawmakers and regulators propose major reforms, including the Senate's SUSTAIN 340B Act and a January 2027 rebate pilot, amid legal battles over contract pharmacies and patient definitions.

Charity care report

  • ▪A report by the Pioneer Institute and CancerCare released on September 24, 2026, found 340B hospitals spent 2.16% of operating expenses on charity care (1.6% for uninsured patients), compared to 2.82% (2.26% for uninsured) at non-340B hospitals.
  • ▪The Pioneer Institute and CancerCare report called for greater transparency, auditable revenue reporting, and requiring 340B hospitals to provide more charity care than non-340B hospitals.

Disputes over hospital charity care and assets

  • ▪The American Hospital Association stated that 340B hospitals have provided nearly $100 billion in total community benefits, including charity care, behavioral health clinics, and free or discounted drugs.
  • ▪A HEAL Collaborative analysis released in March 2026 found that 340B hospital assets grew nearly 40% from 2014 to 2022, while uncompensated care per bed fell 15%.

Congressional reform proposals

  • ▪The United States House of Representatives' SECURE 340B Act, introduced on July 6, 2026, proposes pausing the manufacturer rebate model for four years while implementing a new patient definition and contract-pharmacy standards.
  • ▪The United States Senate's SUSTAIN 340B Act, introduced on August 5, 2026, proposes establishing a statutory patient definition, ending the rebate pilot program within one year, and transitioning to an independent data clearinghouse.

Proposed CMS changes

  • ▪HHS is reportedly considering transferring 340B program oversight from the Health Resources and Services Administration to the Centers for Medicare & Medicaid Services by the end of September 2026.
  • ▪The Centers for Medicare & Medicaid Services proposed cutting 340B Medicare reimbursement to average sales price minus 33.4%, which is projected to reduce Original Medicare drug payments by $4.55 billion in the first year.

Federal regulatory actions and audits

  • ▪A 2023 Government Accountability Office review of 53 hospitals receiving COVID-19 eligibility exceptions found duplicate discounts were the most common issue audited by the Health Resources and Services Administration.
  • ▪The Health Resources and Services Administration scheduled a 340B rebate pilot program for January 2027 covering approximately 25 drugs, which hospital groups project will have an annual cash-flow impact exceeding $1 billion.

Contract pharmacy access and fees

  • ▪Josh Weber of health-system pharmacy argued at the National Association of Specialty Pharmacy 2026 conference that contract pharmacy networks are not linked to patient benefits and carry dispensing fees of $1,000 to $2,000 per transaction.
  • ▪In February 2026, the Fifth Circuit Court of Appeals unanimously upheld Louisiana's contract-pharmacy access law against challenges from AbbVie, PhRMA, and AstraZeneca.

Overview and growth of the 340B program

  • ▪Hospitals and outpatient facilities purchased $100 billion worth of drugs through the 340B drug discount program in 2025, representing an increase of approximately 22% to 23% from the prior year.
  • ▪The 340B drug discount program, created by Congress in 1992, allows safety-net healthcare providers to purchase outpatient drugs at discounts of 25% to 50% from drug manufacturers.

Debatable claims

  • ▪A strict, time-bound patient definition is necessary for the 340B program
  • ▪Charity care spending is an inadequate measure of 340B hospitals' community benefits
  • ▪Congress should require 340B hospitals to provide more charity care than non-340B hospitals
  • ▪The HRSA's 340B rebate pilot program does more harm than good

2 sources

Healthcaredive
340B hospitals lag behind peers in charity care spending: report
View source article
Ajmc
Opposing Sides of 340B Debate Converge on Data Clearinghouse, Patient Definition | AJMC
View source article

Story comments

Loading comments…

Related entities

United States

Topics

Healthcare ReformDrug pricingHealthcare Policy