Since 1992, the 340B Drug Pricing Program has helped health care providers serving low-income and uninsured patients stretch their already limited federal resources. Last week, Senator Bill Cassidy, M.D. (R-LA) released his findings from an investigation he started last year on the program. He’s now calling for legislative and executive actions to reform the program, including adding new 340B entity reporting requirements. Below is a summary of his report, as well as updates on other policymaking relating to the 340B program.  

Cassidy’s Findings: Ballooning Savings and a Lack of Oversight 
The 340B program’s growth – reaching $66.3 billion in drug purchases in 2023, compared to $38 billion in 2020 – has sparked concerns about transparency and whether the savings benefit vulnerable populations.  

Senator Cassidy’s report focused on the savings of a few 340B hospitals, Federally Qualified Health Centers (FQHCs) and contract pharmacies. It highlighted the following: Bon Secours Mercy Health’s Richmond Community Hospital (RCH) had $276.5 million in 340B benefit (savings and revenue) from 2018–2023, and Cleveland Clinic had $933.7 million. The report also targeted FQHCs like Sun River Health and Yakima Valley Farm Workers Clinic, which also reported significant savings. For contract pharmacies, the report listed CVS Health and Walgreens and accused them of charging rising fees that divert resources from patient care. For drug manufacturers, he included the responses from Amgen, Eli Lilly and Johnson and Johnson,  who argue that they struggle to prevent duplicate discounts and drug diversion primarily due to limited program oversight.  

Cassidy’s Recommendations: Transparency, Reporting, and Guardrails
The report concluded with several recommendations for Congress to modify the program. AHPA also expects a different group of Senators known as the “Gang of Six” to release a legislative proposal for revising the program. It’s still uncertain whether anything will advance this year given other congressional priorities like extending tax cuts. Below are Senator Cassidy’s specific recommendations. 

  • Requiring covered entities to provide detailed annual reporting on how 340B revenue is used to ensure direct savings for patients. This recommendation would significantly narrow the purpose of the program, prescribing how the savings are used. 
  • Addressing potential logistical challenges caused by increased administrative complexity. 
  • Investigating the types of financial benefits contract pharmacies receive for administering the 340B program.  
  • Requiring transparency and data reporting for entities supporting participants in the 340B program. 
  • Clarifying manufacturer discount guidelines to ensure patient benefits, including examining legislative changes to the definition of “eligible patient” and contract pharmacies’ use of the inventory replenishment model.  

State Policymaking to Reform 340B
While the federal government continues to debate 340B program reforms, state legislatures have been busy exploring their own changes. State laws, such as Nebraska’s 340B Contract Pharmacy Protection Act (effective April 10, 2025), prohibit drug manufacturer restrictions on contract pharmacies. States such as Florida, Texas and California have sought similar protections. Colorado is considering two 340B bills – one which protects 340B entities against drug manufacturer restrictions (SB 071) and another (SB 124) that mandates hospitals to report 340B savings usage, among other things. Kentucky followed a similar approach to Colorado, debating two different bills that would have prohibited drug manufacturer restrictions while also adding new hospital reporting requirements. The Kentucky bills failed to pass. 

Executive Actions to Reform 340B  

On April 15th, President Trump signed the Executive Order “Lowering Drug Prices by Once Again Putting Americans First,” directing HHS to condition health center grants on offering insulin and injectable epinephrine at 340B prices (plus a minimal fee) to low-income patients within 90 days. It also mandates a survey of hospital acquisition costs for outpatient drugs, with the goal of adjusting 340B payments. AHPA expects future revisions to the 340B program which could include payment adjustments and additional reporting requirements.  

 

AHPA extends our gratitude to Nikita Leukhin, guest author of this article. 
Nikita is a student in the Bachelor of Healthcare Management program at Kettering College.