The Pharmaceutical Research and Manufacturers of America (PhRMA) said on March 19 that Congress should take a closer look at the 340B drug pricing program, citing concerns over rapid expansion, weak oversight, and limited evidence of direct patient benefit.
PhRMA said the structure of the 340B program has allowed covered entities and contract-pharmacy partners to purchase medicines at steep discounts while billing at significantly higher rates. In 2023, these markups generated an estimated $65 billion in revenue, with the group raising concerns about limited guardrails, transparency requirements, and the lack of binding standards ensuring savings are passed directly to patients.
A Senate Health, Education, Labor and Pensions Committee majority staff report examined two major hospital systems following allegations that 340B incentives may have influenced service patterns in underserved communities while supporting expansion into higher-reimbursement, wealthier areas. The report found Bon Secours Mercy Health and Cleveland Clinic each generated hundreds of millions of dollars in 340B-related savings and revenue between 2018 and 2023.
The Government Accountability Office (GAO) reported in 2025 that the number of 340B covered-entity sites more than doubled from 2013 to 2023. It also found that most oversight recommendations to the Health Resources and Services Administration remain unimplemented. The GAO said audit processes do not fully assess duplicate-discount compliance and do not ensure that violations are fully corrected.
Covered entities purchased $81.4 billion in outpatient drugs through the program in calendar year 2024, with disproportionate share hospitals accounting for more than $64.1 billion of that total, according to HRSA. This concentration underscores how heavily the program is driven by large hospital systems rather than smaller safety-net providers.
PhRMA describes itself as a trade association representing leading innovative biopharmaceutical research companies. It said its member companies have invested more than $850 billion over the past decade in developing new treatments and cures and support nearly five million U.S. jobs.
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