Instead of helping patients, hospitals and pharmacy benefit managers use the 340B program to generate billions of dollars in profits. According to a New York Times investigation, one New Mexico hospital paid $2,700 for a cancer drug through the 340B program, then billed insurance $22,700.
After getting paid $10,000 by the patient’s health insurance, the hospital sent the patient to debt collection for an additional $2,500.
340B Reform Principles: Patient Definition
One of the biggest problems with the current 340B program is the lack of a clear, statutory definition of an “eligible patient.” The existing 1996 HRSA guidance is overly broad, allowing covered entities to stretch definitions and maximize profits at the expense of program integrity. This ambiguity enables abuse, diverting discounts away from vulnerable patients.
Congress can increase 340B accountability by using these 5 criteria to establish a 340B patient definition.
1. 340B Patient Identification at Time of Dispense
The Problem: Hospitals are gaming the 340B system by determining 340B eligibility after the fact. Right now, 340B hospitals comb through patient records days or even weeks after a prescription is filled to find ways to classify more prescriptions as 340B-eligible. Patients might be classified as being 340B without their knowledge.
The Solution: Require hospitals and pharmacy benefit managers to clearly identify 340B patients at the time their prescription is filled, not retroactively assigned to maximize hospital profits.
2. Ongoing Patient Relationship
The Problem: Hospitals currently claim 340B eligibility for patients when they don’t have a genuine ongoing care relationships. As a result, the wrong hospitals are capturing 340B program revenues 340B program revenue should support hospitals that are providing a continuity of care, regular follow-ups, and a documented history of treatment to low-income and rural patients.
The Solution: Require an established, ongoing patient relationship between the individual and the 340B covered entity. This means more than a one-time emergency room visit or a referral designed solely to capture 340B eligibility.
3. Recent Healthcare Service Connection
The Problem: Hospitals claim 340B eligibility for prescriptions that have no connection to recent healthcare services provided by the covered entity. These paper patients siphon resources away from where the 340B program intended.
The Solution: Require a 340B discount be linked to an in-person healthcare service provided by the covered entity within the last 12 months of filling the most recent 340B prescription. This ensures the medication is truly connected to care provided by the 340B facility and not paper patients.
4. Clear Prescription Link
The Problem: Hospitals fill 340B prescriptions written by outside physicians who have no relationship with the covered entity, using contract pharmacy arrangements to maximize revenue.
The Solution: Require a direct, documented link between the patient’s prescription for the 340B drug and the actual healthcare services provided by the covered entity.
5. Financial Eligibility Requirements
The Problem: Hospitals currently use 340B discounts for patients with private insurance and substantial financial resources, completely abandoning the program’s mission to help vulnerable populations.
The Solution: Require patients to meet clear financial eligibility criteria for 340B benefits. The program was designed for low-income, uninsured, and underinsured patients, not everyone who happens to visit a 340B hospital. Financial eligibility should be based on income thresholds similar to other federal safety-net programs, ensuring 340B truly serves as a last resort for patients who can’t afford their medications through other means.
Take Action Now: Join the Patient’s Right to Know
Patients Rising has launched the Patient’s Right to Know Campaign to advocate for patient-centered reforms that ensure the 340B Program helps patients in need. By signing the Patients Rising petition, you are standing up to make sure hospitals use their savings to help the patients who need it most.
You have a Right to Know:
- Am I a 340B patient and why hasn’t anyone told me?
- Is my care being used to generate hospital profits instead of helping patients like me?
- Am I receiving any of the savings from the 340B program?
- If not, who is keeping the extra money — and where is it going?
Join the Patient’s Right to Know Campaign and sign the petition today to make healthcare fair and accessible. Help us fix 340B for the people who need it most.
Click here to support the Patient’s Right to Know Campaign
Patients deserve transparency. Patients deserve care. Patients deserve better.