Senate HELP Committee Hearing Highlights Need to Reform 340B
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. But the lack of guardrails on the program and failure to define a patient has led to it being abused by hospitals and contract pharmacies to inflate their profits. As Congress seeks ways to drive down healthcare costs, legislators should make reforming the 340B program a priority, as the Council for Citizens Against Government Waste (CCAGW) has long recommended.
At the July 31, 2025, Senate Committee on Health, Education, Labor and Pensions (HELP) hearing, “Making Health Care Affordable: Solutions to Lower Costs and Empower Patients,” Chairman Bill Cassidy (R-La.) discussed 340B. He said, “another area of bipartisan interest is the 340B program. The common understanding among legislators, whether true or not, their understanding is that the discounts received by hospitals are supposed to make healthcare services more affordable and accessible for low-income and uninsured patients. But the law is actually unclear.” Chairman Cassidy went on to point out the negative effects that the problems with the 340B program have had on American patients and said, “In fact, a recent study by the National Pharmaceutical Council found that 340B may make employer sponsored insurance more expensive, costing workers an estimated $4.5 billion from 2017 to 2023.”
Sen. Jon Husted (R-Ohio) also used the hearing to promote reforms to the 340B program. Sen. Husted explained how hospitals are misusing the program to inflate their profits and said, “a hospital can, for example, purchase a physician administered drug at a large discount, but sell it to Medicare or private insurers at full market prices, keeping the price difference as a profit.”
Chairman Cassidy’s and Sen. Husted’s comments at the hearing are not the first sign of the growing appetite on Capitol Hill to reform the 340B program. An April 24, 2025, Senate HELP Committee Majority Staff report on reforming the 340B program included a recommendation to clarify the definition of an eligible patient and ensure that the discounts benefit those patients.
The 340B program is a wasteful and regressive reverse Robin Hood program that robs from eligible patients and smaller hospitals and gives to large hospitals and pharmacies. Drug purchases grew from $2.5 billion in 2005 to $66 billion in 2023, making it the second largest federal prescription drug program after Medicare. Congress should make reforming the 340B program a priority by including a clear definition of an eligible patient, providing better verification of patient eligibility when the prescription is filled, determining a relationship between the patient and the covered entity, verifying that services were provided within the past 12 months, and increasing program transparency.
The Senate HELP Committee report and Chairman Cassidy’s and Sen. Husted’s comments at the July 31, 2025, hearing should serve as a jumping off point for Congress to make much-needed reforms to the 340B drug discount program.
