A major healthcare policy change is quietly moving through New York’s state budget negotiations, and most patients have never heard of it.

The issue centers on the federal 340B drug pricing program, a program originally designed to help safety-net healthcare providers stretch limited resources and serve vulnerable patients.

But as lawmakers debate expanding protections for the program in New York, an important question remains unanswered:

Will patients actually see the savings?

What Is the 340B Program?

The 340B program requires pharmaceutical manufacturers to sell certain medicines to eligible hospitals and clinics at steep discounts — often 25% to 60% below the list price.

The program was created so safety-net providers could:

• expand care
• serve more vulnerable patients
• strengthen access to healthcare in underserved communities.

In theory, the savings generated by the program should help improve patient access to care.

In practice, however, there is little transparency about how those savings are used. 

What Is Happening in New York?

The New York State Senate has included new language related to the 340B program in its proposed state budget.

Instead of moving through the normal legislative process, the policy is now part of closed-door budget negotiations between:

• the State Senate
• the State Assembly
• the Governor’s office.

Budget negotiations are often completed quickly and with limited public debate.

That means a significant healthcare policy change could be finalized without the transparency or stakeholder engagement that complex healthcare policies typically require.

The Missing Piece: Patient Benefit

Supporters of expanding 340B protections argue the policy helps hospitals continue to access discounted medicines.

But the proposal does not appear to include requirements that ensure those savings reach patients directly.

Today, hospitals participating in the 340B program can purchase medicines at deep discounts while still billing insurers at the full price.

In many cases, the difference between the discounted purchase price and the reimbursement amount becomes revenue for the hospital.

What patients often do not know is:

• whether their medication was purchased through the 340B program
• how much the hospital paid for the drug
• whether the patient received any portion of the discount.

Without transparency, it is difficult to determine whether the program is fulfilling its intended purpose.

Why Transparency Matters

The 340B program has grown dramatically over the past decade.

Today, participating hospitals and clinics receive tens of billions of dollars in drug discounts each year.

Yet there is still no consistent requirement for hospitals to publicly report:

• how much they save through 340B
• how those savings are used
• whether patients directly benefit.

If states expand protections for the program without addressing transparency and accountability, patients may continue to see little direct impact on their healthcare costs.

A Better Approach

If policymakers want to strengthen the 340B program, there is a clear path forward.

Any policy changes should include safeguards that ensure the program benefits patients as originally intended.

That could include:

Accountability and Transparency requirements
Hospitals should publicly report how much they save through the 340B program and how those funds are used.

Patient notification
Patients should know when their medication was purchased through the 340B program.

Direct patient benefit
Policies should encourage or require that some portion of the savings help reduce patient out-of-pocket costs.

Protection for true safety-net providers
Rural hospitals and community clinics serving vulnerable populations should remain central to the program’s mission.