ADAP Advocacy has called for oversight of the 340B Drug Pricing Program to move from HRSA to CMS.
The advocacy organization said the shift would address what it described as longstanding gaps in regulatory oversight and enforcement, according to a July 27 news release. In a recent policy paper, ADAP Advocacy argued the program has grown beyond HRSA’s oversight capacity and said CMS has the regulatory and enforcement experience needed to oversee the program.
HRSA reported more than $100 billion in 340B drug sales in 2025, with hospitals accounting for more than 79% of purchases. ADAP Advocacy CEO Brandon Macsata said HRSA “has demonstrated over 34 years that they are simply unable to adequately ensure that covered entities are using the significant revenues they enjoy from 340B sales in ways that comport with either the spirit or the letter of the law.”
ADAP Advocacy also cited its analysis of 98 hospitals’ federal Form 990 filings, which found 27 increased charity care as a percentage of annual revenue after becoming 340B-eligible, while 41 saw charity care decline by 50% or more. Marcus Hopkins, the group’s lead health policy consultant, said the findings point to “a fundamental disconnect between the intent of the 340B statute — to reinvest those funds into expanding access and affordability to patients in need — and the belief by many covered entities that they are entitled to use those revenues however they see fit with zero oversight.”
The proposal isn’t new. HHS floated moving 340B oversight to CMS in June 2025 as part of a broader agency reorganization, framing it as a way to use CMS’ in-house drug pricing expertise and streamline oversight.
Health systems, meanwhile, have continued to press HRSA directly rather than wait on a possible CMS handoff. The American Hospital Association in April urged HRSA to scrap its rebate model, citing more than $1 billion in projected annual costs to hospitals.
Most recently, the D.C. Circuit affirmed July 21 that drugmakers — including Novartis, Johnson & Johnson, Bristol Myers Squibb and Eli Lilly — cannot implement 340B rebate models without HHS approval. Under those models, the drugmakers required 340B hospitals to pay full price upfront for outpatient drugs and submit claims data to receive a rebate for the discount later, rather than receiving the discount at the time of purchase — a structure hospitals argued added administrative burden and delayed access to savings. The ruling was the latest in a string of court decisions reinforcing HRSA’s authority over rebate proposals even without a formal transfer to CMS.
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