The 340B program was created by Congress in 1992 to help vulnerable patients access the care they rely on to stay healthy. Through 340B, qualifying hospitals and clinics serving a large number of low-income and uninsured patients can purchase deeply discounted medicines directly from pharmaceutical manufacturers with the expectation that they use these savings to help patients to afford and access their necessary medications.

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While originally intended to serve the most vulnerable patients, a lack of federal oversight has allowed 340B to evolve into a profit center for many hospitals and for-profit corporations. Many large hospitals that participate in 340B are marking up the cost of medicines instead of using the discounts received to improve access to care. Medicine price mark-ups are almost 7x higher at 340B hospitals than at independent clinics. In 2024, an investigation by the North Carolina State Treasurer revealed that 340B hospitals in North Carolina charged state employees and teachers over five times for cancer medicines.

In addition, 340B hospitals are able to also contract with an unlimited number of pharmacies, many of which are out-of-state and owned by the nation’s largest pharmacy benefit managers (PBMs) and insurers. As a result, PBMs and 340B contract pharmacies are raking in massive profits from marked up 340B medicines – without passing any savings acquired by buying in bulk medications at 340B pricing on to patients.

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Not only does 340B abuse limit patient access to care, it also impacts local businesses, employers, and local taxpayers. Unchecked growth of the program drives billions of dollars a year in extra healthcare costs for employers, while lost rebates reduce tax revenues that could be invested back into the community and increase costs for individual taxpayers. Each year, 340B costs Georgia employers and workers an average of $187M. If Georgia legislators move to expand the program, these costs will only increase.

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340B is a federal program that needs a federal solution. Federal legislation including the 340B ACCESS Act, introduced in September 2025 by Representative Buddy Carter (R-GA) and Diana Harshbarger (R-TN), has the potential to eliminate abuse, lower patient costs, and preserve vital access to care for underserved communities.                                                                               

Momentum is building for 340B reform. This year, the Health Resources and Services Administration (HRSA) released a revised 340B Rebate Model Pilot Program. This represents a significant step forward in bringing transparency and accountability to the 340B program and it is one of the strongest examples to use as how the federal government is trying to reform and rein in 340B.

Congress must build on this progress and continue to prioritize fixing the 340B program.