The 340B Drug Pricing Program was established in 1992 to provide discounts on pharmaceuticals to low-income patients, but like other too many other federal programs, it has ended up both wasting money and failing to provide the intended benefits.  It has also been subject to abuse by large hospitals and contract pharmacies, which have enriched themselves by siphoning off the money that is supposed to help patients.

While the problems with 340B have been exposed in Congress during the House Energy and Commerce Committee’s June 4, 2024, oversight hearing and by private sector organizations like the Council for Citizens Against Government Waste (CCAGW), the Pioneer Institute, and Xcenda, there had not been any review of how the program works in each state.  But there is now, after the Minnesota legislature required 340B covered entities to begin providing annual reports on data related to their 340B prescription drug purchases in 2024 to the Department of Health (DOH).

The November 25, 2024, DOH report found that hospitals in the state received at least $630 million in 340B revenue in 2023.  But that may only be half of total 340B revenue in the state based on national data for the program.  The report found that the largest hospitals, which equal 13 percent of the participating hospitals, received more than $500 million, or 80 percent of the revenue.  The highest profit from 340B was $129 million at M Health Fairview University of Minnesota Medical Centers.  That was not the case for federal safety-net grantee clinics, which generated the least net 340B revenue, and some showed a loss. 

The Minnesota DOH report provides more transparency and exposes the abuses of the program.  It should be a wake-up call not only for Congress to move forward with 340B reform as CCAGW has recommended, including a clear definition of a patient and verification of patient eligibility by covered entities, but also for states to stop meddling with the program until they perform their own analysis of how it is impacting patients and taxpayers within their borders.  Making the 340B program more efficient should also be taken up by the Department of Government Efficiency. 

340B is not working as intended by Congress when it was established 32 years ago.  Instead, profits have grown exponentially at large hospitals while small hospitals suffer, and much-needed reforms are not moving forward.  The new Congress and Trump administration should act quickly to prevent further abuse of 340B and help patients get the discounts they need and deserve.