By: Guy Anthony, 340B Patient Advisory Committee Chair & Board of Directors Co-Chair, ADAP Advocacy
For more than three decades, the 340B Drug Pricing Program has been characterized as a vital part of America’s healthcare safety net. In ADAP Advocacy’s latest policy paper, "340B Program: The Glue That Should Hold the Healthcare System Together," we argue that 340B should help hold together a fragmented healthcare system for people who are uninsured, underinsured, low-income, or otherwise struggling to access care. I should know because at times, I have been all those people.
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| Source: ADAP Advocacy |
But that glue only works when it sticks to what it was meant to hold together: affordable services available to patients. Right now, 340B is in a “sticky” situation because big hospital systems and mega service providers are intoxicated by their unfettered access to 340B-generated revenues, regardless of whether they’re funding direct services.
Congress created the 340B Drug Pricing Program to extend federal resources and improve patient care. The Affordable Care Act added requirements for hospitals to provide free care and financial aid to poor patients, also known as charity care. What’s particularly striking is that charity care continues to decline year after year. Patients owe at least $220 billion (about $680 per person in the U.S.) in medical debt, and nearly 75% of it is owed to hospitals, with Black and Hispanic communities disproportionately impacted.
For 340B-eligible nonprofit hospitals, it’s hard to defend such practices. ADAP Advocacy’s own research found that 340B-related drug purchases are increasing at the same time medical debt remains a serious burden for Americans. Given this fundamental defect in healthcare coverage, central questions arise:
- If 340B is designed to expand access and reduce financial burden, then why are patients increasingly unable to afford care?
- Why is 340B not adequately or even meaningfully addressing this problem?
- Why is it failing to meet the needs of the uninsured and the underinsured, the very persons it was designed to serve?
More than two-thirds of 340B hospitals provide less charity care than the national average, and more than one-third spend less than 1 percent of total revenue on it. Is that American?
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| Source: ADAP Advocacy |
If 340B is working as reform denialists claim, we should see proof in patients’ lives, not just hospitals’ bottom lines. Cuba Gooding Jr.’s character in Jerry Maguire demanded, “Show me the money!” I’m asking to show me the patients who can finally afford their medication and get care without going into debt.
So, I keep coming back to one question: where am I, the patient, in all of this?
It gets harder to answer as contract pharmacies expand. Research cited in our white paper (p. 13) found that contract pharmacy growth has been concentrated in affluent, predominantly White neighborhoods, while the share of 340B pharmacies in disadvantaged Black and Hispanic/Latino neighborhoods has declined. The communities most likely to need the program are seeing less of its growth.
I don’t want to see 340B destroyed. I want it fixed. As Alexander Den Heijer wrote, “When a flower doesn’t bloom, you fix the environment in which it grows, not the flower.” Community health centers, Ryan White clinics, hemophilia treatment centers, and other safety-net providers depend on 340B, and patients depend on them. But patients asking how that money is being spent, which is after all generated in their name, shouldn’t be dismissed by those providers.
Protecting the 340B Program cannot mean protecting the status quo. Too often, covered entities absorb 340B revenue into broader hospital budgets instead of reinvesting it in uninsured and underinsured patients.
Patients deserve receipts. Our policy paper calls for mandatory annual reporting on how much 340B Program revenue covered entities generate and where it goes, including charity care, medication assistance, and community services [p. 15]. And if a vulnerable patient generates a 340B discount, that patient should benefit from the 340B price [pp. 14–15].
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| Source: ADAP Advocacy |
The proposed retrospective rebate model, which would replace the existing upfront-discount model, would represent a step in the right direction, and one that patients are increasingly embracing because it requires covered entities to be held accountable for how 340B revenues are spent. Interestingly enough, such a model has been in place for over three decades.
Many state AIDS Drug Assistance Programs, or ADAPs, use a rebate model and have increasingly relied on 340B dollars as a share of their total budget. ADAPs now serve more patients, not fewer, despite their dependence on those rebates, providing strong evidence that this works when the discount is tied to a clear mission and measurable outcomes. The National Alliance of State & Territorial AIDS Directors reports those outcomes annually in its monitoring report.
The 340B Program was supposed to help the person living with HIV trying to stay virally suppressed, the uninsured patient terrified of opening another hospital bill, the college student rationing medication, and the Black or Brown family already carrying a disproportionate share of medical debt. For hospitals, they are supposed to help those patients most in need by offering charity care. It should be the standard, not the exception.
I believe in the 340B Program, which is why I want its broken pieces mended. It can still be the glue that holds our safety net together, but only if the discount follows the people who need it most.
Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website.
Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.











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