PhRMA executive on 340B costs: ‘The more hospitals use 340B as a profit center, the more Medicaid loses’

Elizabeth Carpenter, Executive Vice President of Policy and Research for the Pharmaceutical Research and Manufacturers of America (PhRMA), said that the 340B hospital markup program cost taxpayers billions in lost Medicaid rebates. The statement was made on X.

"New research from BRG finds the 340B hospital markup program cost state and federal taxpayers an estimated $6.5 billion bc of lost Medicaid rebates," said Carpenter, Executive Vice President, Policy and Research. "The more hospitals use 340B as a profit center, the more Medicaid loses. It is time to get real about the cost of 340B."

According to the Congressional Research Service, the 340B Drug Pricing Program allows eligible hospitals and clinics to purchase outpatient drugs at discounted prices to support care for underserved populations. However, critics argue that some hospitals exploit the program to generate profit rather than serve vulnerable communities.

A July 2025 report from BRG found that the 340B Drug Pricing Program cost Medicaid an estimated $6.5 billion annually in lost rebates due to its current structure. The research showed that financial impacts are driven largely by how hospitals and contract pharmacies utilize the program. The study was funded by PhRMA.

The U.S. Government Accountability Office (GAO) found that between 2013 and 2017, the number of hospitals participating in the 340B program grew by 60%, prompting calls for stronger oversight to ensure the program aligns with its original intent.

Carpenter is Executive Vice President of Policy and Research at PhRMA and formerly served as President of Avalere. She has held senior advisory roles in health policy at McKenna Long & Aldridge LLP and the New America Foundation, and began her career with Senator Lincoln Chafee.