Established by Congress in 1992, the 340B Drug Pricing Program was intended to help safety-net providers improve access to healthcare for low-income, uninsured, and other vulnerable patients. Through the program, biopharmaceutical companies provide deep discounts on outpatient medications to 340B eligible covered entities, which include safety-net hospitals and federal grantees like Community Health Centers (CHCs), rural health clinics, and other providers treating underserved communities. Those savings are intended to be used to support these entities in providing care to patients in need and expanding access to affordable medications and services.
The fundamental purpose of the 340B program – making sure vulnerable patients can obtain essential medications – remains vital. However, purpose by itself is not sufficient. More than three decades later, patients deserve clear evidence that the program is operating as intended and delivering on its promise to ensure resources are available for health care for the neediest Americans.
Since its establishment, the 340B program has grown significantly. In 2024, 340B covered entities purchased $81.4 billion in covered outpatient drugs through the program. As of mid-2025, about 32,000 pharmacies – which represent nearly 60% of the country’s pharmacy industry – contract with hospitals and federal grantees that participate in 340B.
As the program continues to balloon in size, stakeholders are increasingly asking a critical question: Is the 340B program truly benefiting patients as Congress intended?
Growth Without Guardrails
Data make clear that the 340B program has expanded dramatically since its inception – and in ways unforeseen by the stakeholders who crafted it. Unfortunately, transparency and oversight requirements have not kept pace.
Today, complex financial arrangements – including increased use of contract pharmacies and the involvement of pharmacy benefit managers (PBMs) – play a larger role in how 340B operates. Without clear reporting requirements, there is no way to determine whether program savings are being used to benefit patients as they were intended.
For individuals managing lifelong chronic conditions – such as cancer, HIV, autoimmune diseases, and bleeding disorders – access to medications is not optional. Treatment is ongoing, and the costs can be significant. When the connection between 340B savings and patient affordability is unclear, those living with chronic and other complex diseases are most likely to feel the impact.
A Patient-Focused ApproachRecent developments in Virginia highlight a constructive path forward. Rather than moving ahead with proposals to expand the 340B program before evaluating how it currently serves the needs of patients, some state lawmakers proposed instead to conduct a study into the program’s impact in the Commonwealth. Under the proposal, a group of stakeholders from across the healthcare system would conduct a careful evaluation of how 340B operates across Virginia, reporting back to the General Assembly with findings and policy recommendations after finalizing the review.
This approach reflects an important principle: before expanding a program that has grown substantially over time, policymakers should have a comprehensive understanding of how 340B currently operates and whether — and under what circumstances — it may not be delivering the intended benefits to patients.
Reform to Strengthen, Not Weaken 340B
Calling for reform and greater understanding of how 340B operates is not a call to dismantle the program. It is a call to ensure the program works as intended — by directly benefiting those who need it most.
The efforts by Virginia lawmakers to pause and study the current state of the 340B program before pushing forward with expansions offer other states a model for responsible, patient-centered policymaking. As conversations about 340B transparency and reform continue at both the state and federal levels, the voices of patients living with chronic illness must remain at the center.
CCPA has put forth three key policy priorities to strengthen the 340B program and return it to its original intent.
- Ensure 340B discounts serve vulnerable patients: Require hospitals and pharmacies to ensure patients, not corporate interests, see the benefits of 340B savings.
- Prioritize safety net providers and patient access: Ensure grantees can continue their valuable mission while incentivizing 340B entities to maintain facilities close to underserved patients.
- Improve transparency and accountability and protect the 340B program from abuse: Protect the program from abuse by entities, such as PBMs, who have been unfairly profiting from the program for years. New transparency measures should prevent misuse and ensure equal accountability for all covered entities and partners in the program.
Learn more about the 340B Drug Pricing Program with the following CCPA resources:
- Blog: Understanding the 340B Drug Pricing Program and Its Impact on Patients
- Policy Priority: 340B Drug Pricing Program