HEC to Congress: The 340B Promise Is Broken; Pass Patient-Centered Reform

01 Dec HEC to Congress: The 340B Promise Is Broken; Pass Patient-Centered Reform

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On December 1, 2025, a coalition of 20+ organizations led by the Health Equity Collaborative (HEC) sent a strong letter to House Speaker Mike Johnson and Minority Leader Hakeem Jeffries, calling for immediate, comprehensive reforms to the 340B Drug Pricing Program.

The group asserts that the 340B program, originally created as a lifeline for low-income and uninsured patients, is now a broken system that drives massive, unchecked profits for large hospitals and Pharmacy Benefit Managers (PBMs).

The central message is clear: the current structure is exacerbating health disparities across the nation and must be fixed with patient-centered legislation like the 340B ACCESS Act.

The Core Problem: Profit Over Patients

The 340B program allows certain eligible hospitals and providers to purchase outpatient drugs at a steep federal discount. The HEC’s letter highlights that the program’s lack of guardrails and mandatory reporting requirements has incentivized widespread abuse by two primary actors:

    1. Hospital System Profiteering

Large, tax-exempt hospital systems are generating enormous “spread” profits by buying medicines at the discounted 340B price and then billing private insurers, Medicare, Medicaid, and uninsured patients the full list price.

  • The Diversion of Funds: These profits are reportedly not being reinvested into expanding charity care or critical services in underserved communities.
  • The Incentive for Consolidation: Instead, profits are often used to finance mergers, acquisitions, and the opening of new, profitable facilities in affluent, well-insured neighborhoods. This systematic diversion of resources moves care away from the low-income and medically underserved areas the program was meant to support.

    1. PBM and Contract Pharmacy Exploitation

Pharmacy Benefit Managers (PBMs) are also major beneficiaries due to the program’s lack of oversight. A Senate HELP Committee report was cited, finding that large chain pharmacies (often vertically integrated with PBMs) are diverting 340B funds away from the safety-net providers that actually assist needy patients.

  • Impact on Vulnerable Groups: The failure to reform the program disproportionately harms underserved communities, including Black, Latino, and disabled patients, by restricting their access to affordable prescriptions and causing the reduction or closure of vital services like specialty clinics.

CBO Report Validates Flawed Design

HEC’s concerns were recently validated by a Congressional Budget Office (CBO) report released in September. The CBO found several alarming trends from 2010 to 2021:

  • Skyrocketing Costs: Spending on 340B drugs grew at an average yearly rate of 19 percent—a pace faster than market-wide drug spending.
  • Driving up Federal Costs: The program drives up costs for the federal government by incentivizing clinicians to prescribe more drugs and higher-cost drugs, and by decreasing manufacturer rebates that would otherwise lower overall patient costs.
  • Consolidation Incentive: The profitability of the 340B program encourages vertical integration (consolidation) among providers, contributing to a documented increase in total health care spending.

The Solution: Pass the 340B ACCESS Act

To restore the program’s integrity and ensure it supports the neediest patients, HEC strongly encourages Congress to pass the recently introduced 340B Affording Care for Communities and Ensuring a Strong Safety-Net (340B ACCESS) Act.

This legislation is touted as a holistic solution to fulfill the program’s original mission. It aims to:

  • Improve program transparency.
  • Prevent PBMs from diverting funds.
  • Strengthen federal oversight and accountability.
  • Ensure patients receive the intended discounts on medicines.

The full letter can be found here, and the full list of organizations that signed on is listed below.

  • African American Diabetes Association
  • ALLvanza
  • ASPIRA Association
  • BlackDoctor.org
  • Black Women’s Health Imperative
  • Black, Gifted & Whole Foundation
  • Center for Black Equity
  • Choose Healthy Life
  • Latino Commission on AIDS
  • League of United Latin American Citizens (LULAC)
  • MANA, A National Latina Organization
  • National Black Nurses Association, Inc.
  • National Hispanic Council on Aging
  • National Hispanic Health Foundation
  • Organization for Latino Health Advocacy
  • Partnership for Innovation and Empowerment
  • South Asian Public Health Association
  • Southern Christian Leadership Global Policy Initiative
  • The Hispanic Institute
  • Women Impacting Public Policy