A broad-based coalition of 29 organizations representing underserved patient populations and clinical care providers is sounding the alarm about a controversial new bill that could make the broken 340B program even worse for patients.
HR 4581, authored by Rep. Doris Matsui and Senator Peter Welch, would expand an already-abused program that is driving up health care costs for patients and increasing profits for health care middlemen.
“Don’t be fooled: HR 4581 is a step backward for patients,” said Terry Wilcox, Co-Founder and Chief Mission Officer at Patients Rising. “This poorly-drafted bill ignores systemic abuses in the 340B program, propping up a system where corporations profit at patients’ expense.”
She added, “The 340B program was designed to make medicines more affordable for those in need, not to increase profits for hospitals and pharmacy benefit managers.”
n a strongly-worded opposition letter, the patient advocacy coalition highlights how the 340B Drug Pricing Program, originally designed to help vulnerable patients access discounted medications, has veered dramatically off course. The program has grown exponentially without meaningful oversight. Covered entities purchased more than $66 billion in discounted drugs in 2023 alone.
“Due to a lack of meaningful oversight and transparency, the 340B program has grown exponentially,” the coalition writes. “Despite this immense growth, 340B continues to veer off track, benefiting the bottom lines of large hospital systems and middlemen, including national for-profit chain pharmacies and pharmacy benefit managers (PBMs), at a significant cost to all Americans.”
The explosive growth in contract pharmacy arrangements tells the story. Since 2010, when the Health Resources and Services Administration expanded pharmacy contracts, these arrangements ballooned from fewer than 2,000 to more than 200,000 in 2024.
The coalition’s concerns are backed by mounting evidence of program abuse. Contract pharmacies often charge patients based on the full list price even though they acquire medicines at a discount.
A 2020 report found that contract pharmacies marked up prices by an average profit margin of 72 percent for 340B drugs, compared to just 22 percent for non-340B medicines.
Even more troubling, contract pharmacies are increasingly clustered in predominantly affluent areas. According to the coalition letter, “Just 23% of contract pharmacies are in medically underserved areas, and that figure has gotten worse in recent years.”
A recent U.S. Senate Health, Education, Labor, and Pensions Committee report exposed rampant abuses by hospitals and pharmacy benefit managers. The investigation found that two major hospital systems alone generated hundreds of millions of dollars in 340B revenue without passing savings on to patients.
Richmond Community Hospital brought in $276.5 million in 340B revenue from 2018 to 2023 without benefiting patients, while Cleveland Clinic pulled in nearly $933.7 million over just three years with no direct patient benefits.
“This investigation underscores that there are transparency and oversight concerns that prevent 340B discounts from translating to better access or lower costs for patients,” said Senator Bill Cassidy, M.D., Chair of the Senate HELP Committee.
340B program abuses hurt vulnerable patients and raise costs for everyone. A 2025 IQVIA analysis found that insured patients nationwide are paying hundreds of dollars more in healthcare costs due to 340B markups.
“Exploitation of 340B for profit raises costs for everyone,” the coalition letter states. “Codifying contract pharmacy policy with no guardrails would exacerbate existing abuses.”
“When hospitals receive federally-mandated drug discounts, those savings should be passed on to patients,” explained Wilcox. “Instead, we’re seeing a ‘buy low and sell high’ mechanism that allows hospitals to charge patients and employers full commercial prices while pocketing the difference.”
The coalition fighting to stop HR 4581 includes Patients Rising, ADAP Advocacy, CancerCare, Community Oncology Alliance, Global Healthy Living Foundation, League of United Latin American Citizens (LULAC), National Hispanic Council on Aging, and many others representing diverse patient communities.
Rather than expanding the broken program, the coalition calls for “meaningful transparency and oversight to ensure patients in need are benefiting.” They urge Congress to halt any effort to expand 340B without first addressing existing abuses.
Patients Rising has launched the Patients’ Right to Know Campaign advocating for patient-centered reforms, including:
The coalition’s letter points to research showing the program’s failure to serve its intended purpose. An AIR340B report called the current state “a missed opportunity to address those that are medically underserved.”
Studies by the Pioneer Institute have consistently shown that 340B pharmacies are disproportionately located in affluent neighborhoods rather than the underserved communities they’re supposed to help.
“It is imperative to halt any effort to expand 340B without bringing meaningful transparency and oversight to ensure patients in need are benefiting,” the coalition letter concludes.
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