Stephen J. Ubl, President and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), said on X that the 340B program’s rapid expansion hasn’t translated into better access or lower costs and should be refocused through stronger oversight and clearer rules.
"There is no evidence that increased 340B spending is improving patient access or lowering drug costs, despite rapid growth," said J. Ubl, President & CEO. "It's time to bring oversight, clarity, and, most critically, patient focus back to the program."
Congress initiated the 340B Drug Pricing Program in 1992, requiring pharmaceutical companies participating in Medicaid to provide discounted outpatient medications to eligible "covered entities." The Health Resources and Services Administration (HRSA) administers this program to help extend limited resources. According to the Government Accountability Office (GAO), there are ongoing risks such as duplicate discounts and oversight gaps involving contract pharmacies, prompting calls for improved supervision.
Health systems participating in 340B often generate large profits by marking up discounted drugs. A 2022 report by the Community Oncology Alliance indicated that hospitals marked up oncology drug prices by up to 11 times their discounted acquisition cost. Additionally, a Milliman study found that 340B hospitals charge nearly 200% more for outpatient drugs to commercial insurers than non-340B hospitals, raising questions about patient benefit.
Studies published in peer-reviewed journals have shown that many 340B hospitals provide less charity care as a percentage of their operating costs than non-340B hospitals. Research in The New England Journal of Medicine found that between 2004 and 2014, hospitals participating in 340B experienced higher rates of outpatient site acquisition and increased drug spending. However, these changes were not correlated with a proportional increase in services to low-income patients, raising questions about the alignment between program intent and actual outcomes. The lack of robust reporting requirements makes it difficult for policymakers or the public to assess whether 340B revenue is being used as intended.
Ubl leads PhRMA, representing America’s innovative biopharmaceutical research companies. According to PhRMA, the U.S. biopharma sector directly employs over 800,000 people and invests more than $100 billion annually in research and development—more than any other U.S. industry. His role centers on advancing policies that support innovation and patient access, framing his advocacy for clearer 340B oversight within a broader health-system context.
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