02 Jun ALLvanza Op-Ed: How to Lower Health Costs and Improve Access, Rosa Mendoza
Rosa Mendoza, Founder, President & CEO
ALLvanza
June 2, 2026
https://www.thewellnews.com/opinions/how-to-lower-health-costs-and-improve-access/
In April, members of Congress questioned hospital CEOs about the rising cost of health care — and particularly criticized them for abusing a federal charity program.
That criticism is warranted. But harsh words don’t actually bring down the cost of care for patients.
It’s time for lawmakers to tighten the rules around that program, so that it helps the vulnerable patients it was designed to serve.
Congress created the 340B program with good intentions. The program allows hospitals and clinics that serve large numbers of vulnerable patients to purchase medicines from drug manufacturers at a discounted price. Lawmakers expected these safety-net facilities to either pass the discounts on to patients, or use the savings to provide more charity care to underserved communities.
Unfortunately, lawmakers failed to create sufficient eligibility and program requirements. So, today thousands of hospitals are enrolled in a program originally meant to serve fewer than 100.
While some participants use the program as intended, other hospitals currently use it to purchase discounted medicines and resell them at steep markups. Many establish eligible facilities in high-income neighborhoods, rather than low-income ones.
That means low-income and vulnerable patients aren’t benefiting from those discounts or receiving the critical services they need.
In fact, the program is actively raising their pharmacy bills. Doctors at 340B facilities have an incentive to prescribe higher-cost medicines, because those drugs generate greater returns. As a result, patients end up with higher out-of-pocket cost-sharing obligations at the pharmacy.
And the program also raises Americans’ insurance costs, because health plans don’t receive manufacturer rebates on drugs dispensed through 340B.
Latino communities in particular suffer these consequences. Latinos already face higher rates of chronic diseases and struggle to afford necessary prescriptions, but the 340B program diverts critical care.
The unchecked growth of 340B is also siphoning tens of billions of dollars in revenue away from biotechnology companies, making it harder for them to invest in new treatments and technologies.
Medical innovation is a long, costly and risky enterprise. As a result, innovators, companies and investors need clear regulations and strong incentives to pursue medical R&D.
Unfortunately, the 340B program is currently undermining those incentives.
The 340B program is now a bigger source of drug purchases than Medicaid, as discounted purchases reached $81.4 billion in 2024. Drug companies are forced to absorb these massive losses, making it harder for them to take the kinds of risks that produce breakthrough therapies.
Over time, that’ll lead to fewer innovative medicines, devices and even medical artificial intelligence tools that could improve patients’ lives — especially those living with chronic conditions. Patients with diabetes, for instance, could miss out on the next GLP-1, blood glucose monitoring technology or AI tool that helps them adhere to a weight-management plan.
Fortunately, lawmakers could make a few straightforward reforms to the 340B program to get it back on track. The recently introduced Rural 340B Access Act, for instance, includes a number of proposals that would improve program transparency, oversight and accountability.
In its current form, the 340B program is driving up health care costs while undermining patients’ ability to get innovative treatments. It doesn’t have to be this way.
But fixing the problem will require lawmakers to actually act — not just talk.
Rosa Mendoza is the founder, president and CEO of ALLvanza, a nonprofit organization that advocates for the success of Latinxs, and other underserved communities, in our innovation- and technology-based society. ALLvanza can be found on X.