Pharmaceutical Research and Manufacturers of America (PhRMA) announced on May 6 that it launched its "Goldmine: Spa Day" advertising campaign to highlight how large nonprofit hospitals profit from 340B medicine markups without clear patient benefit.
The campaign focuses on the 340B program, which allows eligible safety-net hospitals and clinics to purchase outpatient drugs at discounted prices.
PhRMA argues that some hospital systems are able to buy medicines at reduced rates, bill patients or insurers at higher prices, and use the difference in ways that are not always directed toward patient care. The group says the costs are ultimately borne by patients, taxpayers, and employers.
The 340B program was created to help providers serving low-income and uninsured patients stretch limited resources. However, federal rules do not require discounted savings to be passed directly to patients or used for specific services. Some health policy research has raised concerns about transparency, program growth, contract pharmacy expansion, and whether savings consistently translate into measurable patient benefits, according to JAMA Health Forum.
Oversight of the program has also been the subject of scrutiny.
The U.S. Government Accountability Office has noted gaps in auditing and enforcement, including limits on testing for duplicate discounts and challenges ensuring compliance across participating entities, as well as questions about eligibility and program controls.
At an October 2025 Senate Health, Education, Labor & Pensions Committee hearing, Chairman Bill Cassidy said the 340B program had "ballooned with limited oversight," raising questions about how revenue is used and whether it directly benefits low-income patients. Cassidy said program growth is tied to higher health care costs and pointed out concerns involving contract pharmacies, hospital consolidation, duplicate discounts, and weak transparency requirements.
PhRMA represents leading biopharmaceutical research companies focused on discovering new treatments and vaccines while working on public policies related to medicine innovation and health care affordability.
Alerts Sign-up