340B Abuse Spotlighted At House Ways and Means Committee Hearing
As the rising cost of healthcare continues to concern American businesses and families, the House Ways and Means Committee has been holding a series of hearings exploring the variety of causes of rising healthcare costs. The April 28, 2026, hearing with health system CEOs examined the role of health systems in relation to healthcare affordability, including the abuse of the 340B drug discount program by hospitals. The Council for Citizens Against Government Waste (CCAGW) has long been critical and called for reforms of the program, which was established in 1992 to help federally funded clinics and hospitals and other covered entities that serve large uninsured populations provide discounts on drugs to patients. But the program has instead become a way for hospitals and contract pharmacies to enrich themselves at the expense of patients and taxpayers.
As Committee Chairman Jason Smith (R-Mo.) noted in his opening statement, “large hospital systems also manipulate the 340B drug pricing program to keep steep drug discounts for themselves, instead of passing the savings on to low-income patients.” He cited the exorbitant increase in 340B spending since the Affordable Care Act, also known as Obamacare, became law in 2010, and said “there is little evidence that the $290 billion in discounts given to hospitals under the 340B program since Obamacare was reinvested in patients. Even worse, there is evidence that hospital abuse of 340B actually directly led to increases in Obamacare premiums.”
Rep. Darin LaHood (R-Ill.) also discussed 340B and the need to reform the program. He said, “With Illinois having a significant participation in 340B, we must ensure that this lifeline reaches the vulnerable patients in rural hospitals that the program was intended to serve. That’s why when market power grows significantly, or when public programs are used in ways that do not clearly benefit patients, lawmakers have a responsibility to intervene and assess what’s broken within our system, and that’s what part of today is about.”
Chairman Smith and Rep. LaHood are right. The 340B program is not working as intended and the patients it was designed to help are not seeing the benefits. Congress should act to reform the 340B program. CCAGW has recommended that an eligible patient should be defined as an uninsured, low-income person who does not qualify for Medicare or Medicaid, as well as improving patient eligibility when the prescription is filled and establishing a clear relationship between the patient and the covered entity. Congress should also eliminate duplicate discounts, improve oversight, and increase transparency about hospital’s use of 340B revenue.
The Ways and Means Committee hearing demonstrated that the 340B program is in dire need of reform and Congress should enact these reforms as soon as possible. Reforming 340B would provide the benefits to patients that Congress intended, stop the abuse of the program, and eliminate wasteful spending.
