For people living with chronic diseases, the cost of medication isn’t theoretical. It affects whether they can stay on treatment, maintain their health, and live independently.
Many patients rely on ongoing medications and treatments to manage their conditions. Even modest out-of-pocket costs can add up quickly over time. That’s why the Chronic Disease Coalition digs into complex polity issues to evaluate whether they truly improve access, affordability, and representation for patients—not just systems.
One of those programs is the federal 340B Drug Pricing Program, which allows certain safety net healthcare providers to buy medications from manufacturers at deep discounts.
The Original Mission of 340B
Congress created the 340B program to support low-income and rural communities by helping safety-net providers stretch limited resources. The idea was simple: discounted medications could help providers serve more patients and strengthen care in communities that need it most.
That mission remains important, and it is one many patients strongly support.
The challenge is this: now many other hospitals and clinics also want to buy discounted medication, but without being required to give additional discounts or services to patients. This devalues and threatens the program and states should put patients first.
Patients Tell Us
Patients frequently tell us that their out-of-pocket costs remain the same—even when medications are purchased at significant 340B discounts.
That’s because the program does not require discounts to be passed directly to patients. Instead, healthcare providers may retain the difference between the discounted purchase price and the payments they get from insurers and patients.
Patients support the healthcare providers who care for them, and strong hospitals and clinics are essential to healthy communities. But when programs are intended to help patients, hospitals, PBMs and pharmacies should be able to show it.
Learning From Other States
Minnesota is one of the first states to require public reporting on how the 340B program operates. According to the state’s second annual report, covered entities generated at least $1.34 billion in 2024, more than double the $630 million in 2023.
The report also found that:
- Large hospitals generated more than $1 billion, accounting for over 80% of statewide 340B revenue.
- Safety-net federal grantee clinics, including federally qualified health centers and tribal health centers, generated the smallest share of revenue.
- A relatively small number of covered entities generated the vast majority of 340B revenue in the state.
These findings do not necessarily mean the program is failing, but when billions of dollars flow through a program created to help vulnerable patients, policymakers and the public should be able to clearly see how those funds support patient affordability and care.
What We’re Doing to Keep the Focus on Patients
Large hospitals and health systems are pushing their legislatures to expand 340B so they can pocket the savings. However, expansion doesn’t help with patient affordability.
That is why reforms such as transparency requirements and clear patient protections for this federal program best addressed by Congress.
That’s also why we’re talking directly to legislators about 340B. We’re encouraging them to:
- Protect the program’s focus on low-income and rural communities
- Improve transparency about how 340B revenues are used
- Don’t confuse hospital savings with patient savings: Patients should see direct benefit.