JULY 28, 2026
Federal 340B Drug Discount Program Has Grown to $80 Billion With Limited Accountability, Critics Say
Congress created the 340B drug pricing program in 1992 to help safety-net hospitals and clinics purchase prescription drugs at steep discounts in order to serve low-income and uninsured patients. Annual purchases under the program have grown from $6.9 billion in 2012 to more than $80 billion in 2024, making it the second-largest federal prescription drug program after Medicare Part D. Nearly 2,700 hospitals now participate, far exceeding the roughly 90 hospitals Congress originally anticipated.
The 340B program was designed in 1992 so that participating hospitals and clinics could buy drugs at significant discounts from pharmaceutical manufacturers and use the savings to extend care to uninsured and low-income patients. What began as a modest safety-net initiative has expanded over three decades into one of the largest federal drug programs in the country, with participation and spending growing well beyond original projections.
The Washington Examiner op-ed, written by Jeffrey Mazzella of the Center for Individual Freedom, argued that the program's growth has outpaced its oversight mechanisms. Under current rules, covered entities are not required to demonstrate that 340B discounts reach patients, disclose how much revenue the program generates, or explain how that revenue is spent. The Health Resources and Services Administration audits roughly 200 covered entities per year, a figure the piece described as insufficient given the program's scale.
A central financial concern raised in the piece is the spread hospitals capture by purchasing drugs at 340B discounts and billing insurers at or near full price. In Minnesota, hospitals reportedly kept 98% of net 340B profits generated in 2024. Nationally, the piece cited an estimate of $66.4 billion in profit for 340B participants in that year alone.