New Report Finds 340B Hospitals Pocket $142.2 Billion

The 340B Drug Discount program was created in 1992 to help federally funded clinics and public hospitals that serve a large uninsured population cover the cost of drugs and provide discounts to patients.  However, because Congress never defined an eligible patient and neglected programmatic accountability and transparency, the program has enabled hospitals and contract pharmacies to profit at the expense of taxpayers and patients.

An October 1, 2026, Berkley Research Group (BRG) report found that 340B hospitals received $244.3 billion in total payments from payers and patients in 2025, a 125 percent increase from the 2021 reimbursement total of $108.4 billion.  They spent $102.1 billion to acquire drugs at the 340B discounted price, giving them a margin of $142.2 billion, which they are able to retain as net revenue or use to pay contract pharmacies.  The margin that 340B hospitals make from discounted drugs has more than doubled from the 2021 margin of $66.3 billion in.  The report also notes that 340B drug sales make up 27 percent of the overall net drug spending market.

The BRG report underscores the urgency for Congress to enact reforms to 340B, which the Council for Citizens Against Government Waste has been promoting since May 2014.  Reforms to 340B should include defining an eligible patient, better verification of patient eligibility at the time the prescription is filled, a relationship between the patient and the covered entity, verification that services were provided within the last 12 months, and increased transparency.

While hospitals and covered entity pharmacies are generating hundreds of billions of dollars in revenue from the 340B program, the program is failing patients.  Reforming 340B would help low-income, uninsured patients and would put an end to the waste, fraud, and abuse that has continued to torment the program, and Congress should make 340B reform a priority before the end of the 119th Congress.