On April 24, 2025, Senator Bill Cassidy (R-LA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, released a report detailing findings from an investigation into the 340B Drug Pricing Program. The report highlights concerns about transparency and oversight within the program, which allows eligible healthcare providers to purchase outpatient drugs at discounted prices.
The investigation, initiated in late 2023, was prompted by significant growth in the program’s utilization. As of February 2025, over 60,000 covered entities were participating, with discounted outpatient drug purchases totaling approximately $66.3 billion in 2023. The report suggests that without reforms, these figures could escalate to $124.1 billion at wholesale prices.
Senator Cassidy’s report raises questions about whether the savings from the 340B program are effectively reaching low-income patients. It points to a lack of transparency in how hospitals and health systems utilize the discounts, with some institutions reportedly generating substantial profits without clear evidence of patient benefit.
In response, the report calls for legislative reforms aimed at increasing transparency and oversight. These include enhanced reporting requirements for covered entities and stricter guidelines on the use of contract pharmacies, which have seen a dramatic increase in participation—from 789 in 2009 to 25,775 in 2022.
The American Hospital Association (AHA) acknowledged the report, emphasizing the importance of the 340B program in supporting hospitals that serve vulnerable communities. AHA President and CEO Rick Pollack stated that many hospitals use 340B savings to provide financial assistance to low-income patients and to maintain programs that enhance patient services and access to care.
As the debate over the 340B program continues, stakeholders anticipate further discussions on how to balance the program’s original intent with the need for accountability and transparency.
How Health System Leaders Should Respond to the New 340B Report
- Conduct a Thorough Internal Audit
Health system leaders must immediately review their current use of 340B program savings.
- Audit financial flows to show exactly how savings are spent to support underserved patients.
- Assess contract pharmacy arrangements for compliance and transparency, given Cassidy’s report singles out explosive growth in these partnerships.
- Be prepared to document and justify 340B operations in anticipation of possible congressional inquiries or new federal reporting requirements.
- Enhance Transparency and Public Reporting
Cassidy’s report stresses transparency gaps. Proactively:
- Publish an annual 340B impact report showing how program savings fund charity care, community health programs, and other patient services.
- Disclose contract pharmacy relationships and clarify how these arrangements benefit low-income patients.
- Ensure your reporting aligns with best practices or emerging regulatory proposals.
- Strengthen Government Relations and Advocacy
This is a pivotal moment to influence policy:
- Work with national organizations like the American Hospital Association (AHA) and 340B Health to advocate for reforms that maintain the program’s mission while improving oversight.
- Engage local policymakers to educate them on how 340B savings directly benefit constituents.
- Prepare case studies and real-world examples to show legislators the program’s critical role in maintaining safety-net services.
- Prepare for Potential Legislative Changes
Given the bipartisan attention to 340B, changes are highly likely. Leaders should:
- Scenario plan for different regulatory outcomes, such as stricter reporting requirements, limitations on contract pharmacies, or patient eligibility criteria changes.
- Review pharmacy networks to ensure any expansion is mission-driven and can withstand heightened scrutiny.
- Reaffirm the Program’s Mission
Finally, it is crucial to recenter the use of 340B savings around patient care and community health:
- Reassess internal policies to ensure 340B operations are tightly aligned with serving uninsured, underinsured, and low-income patients.
- Frame 340B not as a revenue stream, but as a patient service tool — this will be critical in public and policymaker communications.
