A major healthcare policy shift is slipping through New York’s budget process right now — and most New Yorkers have no idea it’s happening. 

The State Senate has tucked new language protecting and expanding the federal 340B Drug Pricing Program into its one-house budget resolution. Instead of open debate in committee, it’s being hashed out behind closed doors in negotiations with the Assembly and Governor’s office.

The program was created in 1992 to help safety-net hospitals buy outpatient drugs at deep discounts (often 25–60% below list price) so they could stretch those savings to help low-income and uninsured patients. Sounds great on paper.

But here’s the reality in New York today: hospitals are raking in massive profits from 340B, yet low-income patients are being sent to for-profit pharmacies in Texas, contract pharmacies in affluent suburbs, and even out-of-state chains. Charity care is below the national average, and some of the biggest 340B hospitals are parking hundreds of millions of dollars offshore.

We’re not making this up. The numbers come straight from independent reports by the Pioneer Institute, Job Creators Network, and our own Patients’ Right to Know research.

The Program That Was Supposed to Help New York’s Neediest Is Shipping Discounts Across the Country

New York 340B hospitals have 1,695 contract pharmacy arrangements supposedly serving poor patients in the state.

• 178 of them (11%) are located outside New York — some as far away as Hawaii, California, Arizona, and Texas.
• For the top five hospitals, up to 34% of their contract pharmacies are out-of-state. Strong Memorial Hospital alone has 61 contracts outside New York lines. Bellevue has 28. Rochester General has 58.

Low-income New York taxpayers are literally being told to fill their prescriptions at for-profit pharmacies in Texas while the discounts meant for them are being resold elsewhere.

Even worse: 64% of the contract pharmacies supposedly helping New York’s poor patients are located in affluent neighborhoods — the opposite of where the program was designed to work. Only 12% are in rural areas, even though 31% of the state’s zip codes are rural. And just 29% are in zip codes with household income below the state median of $86,830.

Who’s Really Cashing In? PBMs, Insurers, and Big Chains

Look at the top five 340B contract pharmacies with the most agreements in New York:

• Raina RX LLC — owned by Elevance Health (a major insurer)
• Optum Pharmacy 706, Inc. — owned by Optum/UnitedHealthcare
• Plus major chains like Walmart and Express Scripts through thousands of agreements.

These middlemen and big corporations are pocketing the spread between the steep 340B discount and what they charge insurers or patients.

One example that should shock every New Yorker: A 340B hospital bought an essential cancer drug for about $3,400 through the program — then turned around and sold it for more than $25,000. That’s over $20,000 in profit that was supposed to help vulnerable patients, not pad hospital margins or middleman fees.

New York Hospitals Give Less Charity Care Than the National Average — While Assets Grow

New York’s 340B hospitals provide only 1.91% of operating expenses in charity care — below the national average of 2.15%.

• 85% of them fall below the national hospital average of 2.5%.
• New York-Presbyterian (the state’s highest-operating-expense 340B hospital) provides just 0.97%.
• From 2014 to 2022, these hospitals saw assets increase by 38% while uncompensated care dropped by 29%.

Meanwhile, the Job Creators Network’s new analysis of public tax returns shows New York 340B hospitals are collectively holding $1.257 billion in offshore accounts. That includes:

• NYU Langone Hospital: $446 million
• New York Presbyterian Brooklyn Methodist: $244 million
• Kaleida Health: $359 million
• Montefiore Medical Center: $79 million (and more — full list in the JCN report).

These are the same institutions getting billions in federal drug discounts, not to mention the massive tax breaks they receive for being classified as “nonprofit.” Taxpayers and employers are footing the bill while money flows overseas.

Employers in New York are already paying an estimated $445 million more in healthcare costs every year because of foregone rebates caused by the 340B program. Proposed contract pharmacy legislation would add another $138.9 million in costs to employers and state/local governments.

Patients’ Right to Know: The Fix New York Needs

The original 340B program was about helping patients, not creating a cash cow for hospitals, PBMs, and offshore accounts.

That’s why we launched the Patients’ Right to Know campaign. New Yorkers deserve answers to these simple questions:

1. Am I a 340B patient? 
2. How much is my hospital making from my 340B discounted prescription?
3. Why am I being sent to collections or a Texas pharmacy instead of getting help?

Real reform is straightforward and already on the table:

• Require hospitals to publicly report how much they save through 340B and exactly how those savings are used. Last year there were bills like S8380 moving in this direction, so far in 2026 this bill has not been reintroduced. It should be. 
• Mandate patient notification — tell people when their drugs were bought through 340B.
• Prioritize true safety-net providers and low-income communities instead of affluent contract pharmacies and out-of-state chains.
• Block expansions that don’t come with accountability (the exact opposite of what’s quietly happening in the budget right now).

Take Action Today

New York’s budget negotiations are moving fast. Closed-door deals are happening now.

Tell your legislators: No more 340B expansion without transparency and patient protections.

Visit PatientsRight2Know.com to learn more and send a message to Albany. Share this post — the more New Yorkers who understand what’s really happening with their tax dollars and their prescriptions, the harder it will be for this program to keep operating in the shadows.

The 340B program was meant to help patients like you and your family. It’s time we made sure it actually does.

Sources & Further Reading

• Pioneer Institute: “340B in New York” (2025 data)
• Job Creators Network: “Hospitals Capitalizing on Federal Government Program Shelter Billions Offshore” (NY section)
• Patients Rising original research on contract pharmacy locations and markups

Stay tuned — we’ll be breaking down the same issues in states across the country. The abuse isn’t just in New York. But the solutions can start here.

Patients Rising — Putting patients first. Always.