The American Society of Health-System Pharmacists is urging lawmakers to protect the 340B Drug Pricing Program, warning that changes to the discount model could destabilize safety-net hospitals.
In an Oct. 23 statement issued ahead of a hearing before the Senate Health, Education, Labor and Pensions Committee, the ASHP said drug manufacturers, not hospitals, are responsible for the growth of 340B discounts, which are tied to list prices. Between 2008 and 2024, new drug launch prices rose 17,397%, from a median of $2,115 to $370,000. The group emphasized that hospitals benefit only from the margin between 340B prices and insurer reimbursement, a small fraction of inflated list prices.
The ASHP also opposed an upcoming pilot program by the Health Resources and Services Administration that would allow manufacturers to offer retrospective rebates instead of upfront discounts. The group said this model would force hospitals to pay wholesale prices and wait for reimbursement, if it comes at all, effectively giving drugmakers an interest-free loan and disrupting hospital cash flow.
Discriminatory practices by drug companies and payers are also undermining the program, the ASHP said, citing restrictions on contract pharmacies, refusals to offer discounts on specific drugs, and insurer efforts to exclude 340B providers from networks. The organization urged Congress to block such tactics not authorized by the Health Resources and Services Administration.
In a separate Oct. 23 statement to the Senate committee, the American Hospital Association echoed ASHP’s defense of the 340B program, calling it “a vital program that allows eligible hospitals to maintain, improve and expand access to essential services and medications.” The group emphasized that 340B savings enable hospitals to provide discounted drugs, fund community clinics and chronic disease programs, and sustain unprofitable but essential service lines — particularly in rural areas where many hospitals operate at a loss.
Nearly 44% of 340B hospitals reported negative operating margins in fiscal year 2023, according to the AHA, which said the program helps offset chronic underpayments from Medicare and Medicaid. The organization also pushed back against claims that the program has grown “out of control,” arguing that its expansion reflects congressional decisions to include more hospital types and rising drug prices.
The AHA pointed to recent data showing that 340B hospitals provided nearly $100 billion in community benefits in 2022, including $46.4 billion in financial assistance and unreimbursed Medicaid costs. In total, 340B drug purchases reached a record $66.3 billion in 2023, with disproportionate share hospitals accounting for the majority of the spending.
“If not for the 340B program, hospitals’ margins would be even lower as there would be no 340B savings to offset government underpayments,” the AHA said in its statement. “Furthermore, the programs and services supported by 340B would either cease to exist or would require taxpayer dollars to support.”
Both ASHP and AHA urged Congress to reject proposals to replace upfront discounts with rebate models and to curb manufacturer-imposed restrictions on contract pharmacies.
