Senate HELP Committee Hearing Is Next Step for 340B Reform

The 340B Drug Discount Program was given the laudable goal of helping federally funded clinics and public hospitals that serve a large uninsured population cover the cost of drugs and provide discounts to patients.  However, like many other well-intended federal programs 340B has gone off the rails due to the lack of clear intent and definition of a patient, along with poor oversight, leading to exploitation by hospitals and contract pharmacies to generate millions of dollars in profit.  340B must be reformed, as the Council for Citizens Against Government Waste (CCAGW) has long recommended.

The path to fixing 340B took what should be a step in the right direction during  the October 23, 2025, Senate Committee on Health, Education, Labor and Pensions (HELP) Committee hearing, “The 340B Program: Examining its Growth and Impact on Patients.”  Chairman Bill Cassidy (R-La.) opened the hearing by outlining how 340B has become a profit source for large hospitals, saying “it appears that the significant growth of 340B has become a means for some to pad bottom lines, but with little focus on affordability for families or for the employers helping that family pay for their insurance.”  Chairman Cassidy tied 340B reform to lower prices when he said, “if this committee is serious about making health care more affordable, about making drugs more affordable, about improving commercial insurance, and helping the patient, perhaps we need to reform 340B and make sure that patients are put first.”

The Senate HELP Committee hearing also delved into the reasons for the significant increase in 340B drug purchases.  Congressional Budget Office (CBO) Chief of the Health Policy Studies Unit Aditi Sen reiterated the findings of CBO’s September 9, 2025, report on 340B.  CBO found that purchases on 340B drugs increased from $6.6 billion in 2010 to $43.9 billion in 2021, due in large part to 340B hospitals prescribing more expensive drugs, and that 340B increases costs for taxpayers and employers.  The Health Resources and Services Administration’s (HRSA) report on 340B drug purchases revealed a total of $66.3 billion in 2023, which is $22.4 billion, or 51 percent greater than the $49.3 billion in 2021.  That makes 3430B the second largest federal prescription drug program after Medicare Part D.

The hearing also raised questions about duplicate discounts in 340B.  A duplicate discount occurs when a manufacturer provides a discounted 340B price and a Medicaid rebate for the same drug.  Although duplicate discounts are prohibited in 340B and covered entities are required to have mechanisms to prevent them, they still occur due to the lack of oversight of 340B.  Government Accountability Office Director of Healthcare Michelle Rosenberg testified that HRSA’s audits are “unable to determine whether covered entities are following state requirements and taking the necessary steps to comply with the prohibition on subjecting manufacturers to duplicate discounts.”

The October 23, 2025, hearing followed up on the April 24, 2025, Senate HELP Committee Majority Staff’s report on its investigation into the 340B program.  The report made the case for several reforms like those suggested by CCAGW, including a clear definition of an eligible patient as an uninsured, low-income person who does not qualify for Medicare or Medicaid; providing better verification of patient eligibility when the prescription is filled; establishing a clear relationship between the patient and the covered entity; verifying that services were provided within the last 12 months; eliminating duplicate discounts by improving oversight; revising reporting requirements; and increasing transparency around how hospitals are using 340B funds.

340B is in dire need of reform, and since the program was created by federal statute, it is incumbent on Congress to enact permanent reforms.  Congress should seize on the momentum from the Senate HELP Committee’s April, 24, 2025 report and the October 23, 2025 hearing and finally deliver the much-needed reforms to 340B, which would drive down healthcare costs, deliver discounts to patients, stop the abuse of the program by hospitals and contract pharmacies, and eliminate wasteful spending.