For decades, the federal 340B Drug Pricing Program has operated with remarkably little transparency.

Hospitals purchase drugs at steep government-mandated discounts. Insurers reimburse those drugs at full price. The difference between those two numbers becomes revenue for the hospital.

Yet for most of the program’s history, policymakers, patients, and even many healthcare stakeholders had little insight into how much revenue hospitals were generating or how the money was being used.

Minnesota decided to change that.

The First Real Look Inside the Program

In 2023, Minnesota became the first state in the country to require healthcare providers participating in the 340B program to report financial data about their participation. The goal was straightforward: bring transparency to a program that has grown rapidly while remaining largely opaque.

The state’s first report, released in 2024, found that hospitals and clinics generated at least $630 million in net 340B revenue in 2023.

That number alone was significant. But it turned out to be only part of the story.

The Real Size of the Program

When Minnesota released its second report examining 2024 data, the picture changed dramatically. Hospitals and clinics reported at least $1.34 billion in net 340B revenue in a single year.

That represents a 112 percent increase year over year.

At first glance, that kind of increase might suggest explosive program growth. In reality, the jump primarily reflects a more complete accounting of the program.

The first report captured only drugs dispensed through pharmacies. The second report required hospitals to include office-administered drugs—high-cost infusion medicines used to treat conditions such as cancer, autoimmune disease, and neurological disorders.

These drugs are often among the most expensive in modern medicine. Once they were included in the reporting requirements, the scale of the program became far more visible.

Even now, Minnesota officials caution that the $1.34 billion estimate may still understate the true size of the program, because many providers struggled to fully track reimbursements for administered drugs.

In other words, the program may be even larger than the data currently shows.

Who Benefits Most?

Minnesota’s transparency effort also sheds light on which types of providers generate the majority of 340B revenue.

Large hospital systems dominate the program. Hospitals qualifying under the federal program’s Disproportionate Share Hospital (DSH) designation generated more than 80 percent of statewide 340B revenue in 2024.

Yet those hospitals represent only about 12 percent of participating entities.

By contrast, the clinics most often associated with the safety-net mission of the program—Federally Qualified Health Centers and similar providers—generated less than 1 percent of the statewide revenue.

This disparity highlights how concentrated the program’s financial benefits have become.

A Few Hospitals Generate Enormous Revenue

The Minnesota data also shows just how concentrated 340B revenue is among a small number of hospital systems.

One hospital system reported generating more than $334 million in net 340B revenue in a single year.

Another generated over $153 million, while a third reported nearly $100 million.

Taken together, just 25 hospital systems accounted for 90 percent of the program’s total revenue in Minnesota.

For a program originally intended to strengthen the healthcare safety net, this level of concentration raises important questions about how the program is functioning today.

The Drugs Driving the Revenue

Another key insight from Minnesota’s reporting is that a relatively small number of high-cost drugs generate a disproportionate share of 340B revenue.

Many of these drugs are specialty medicines used to treat chronic or life-threatening conditions. Examples highlighted in the report include Humira, Trikafta, and Keytruda.

These therapies often cost thousands of dollars per treatment.

Because hospitals can purchase them at deeply discounted 340B prices while receiving full reimbursement from insurers, the financial spread between acquisition cost and reimbursement can be substantial. As a result, a relatively small number of high-priced medications can drive a large share of hospital 340B revenue.

Running the Program Is Big Business Too

Hospitals and clinics also incur significant costs operating their 340B programs.

In 2024, Minnesota providers reported spending approximately $165 million in operational costs associated with running the program.

Much of that spending went toward contract pharmacies that dispense 340B drugs, third-party administrators that manage compliance and inventory, and internal staff responsible for overseeing the program.

Overall, providers reported spending roughly $12 for every $100 of gross 340B revenue to operate their programs.

The size of this administrative infrastructure underscores how complex—and financially significant—the program has become.

The Question That Still Has No Answer

Minnesota’s transparency initiative has helped answer several important questions about the scale and structure of the 340B program.

But one critical question remains unanswered.

How much of this money actually reaches patients?

The Minnesota Department of Health notes that the reporting law does not track how hospitals use their 340B revenues or whether patients directly benefit from the discounts hospitals receive.

That gap is not unique to Minnesota. It exists across the entire country.

The 340B program was created in 1992 to help safety-net providers stretch scarce resources and expand care for vulnerable patients. Yet more than three decades later, policymakers still cannot clearly answer a basic question: Are patients receiving the benefit of the discounts the program was designed to generate?

Minnesota has taken an important first step by requiring hospitals to report how much revenue they generate from the program. But transparency about revenue alone is not enough.

Patients deserve transparency about outcomes.

Patients Rising believes the next step is clear. Policymakers should require hospitals participating in the 340B program to demonstrate how those revenues improve access to care, reduce costs for patients, and strengthen the healthcare safety net.

That kind of transparency should not stop in Minnesota.

It should exist everywhere.

Because if the purpose of the program is to help patients, then the system should be able to prove it. And if it cannot, then reform should begin with the simple principle that patients have the right to know.