By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy
The American Society of Clinical Oncology (ASCO) released its latest policy position statement on the 340B Drug Pricing Program on May 5th, 2026 (ASCO, 2026). ASCO President, Eric J. Small, MD, FASCO, states, “…reforms focused on eligibility, transparency, and accountability are needed to reflect modern healthcare delivery and to ensure the program continues to benefit the vulnerable people it was designed to help.” But why?
Despite this statement, some of their new positions have raised eyebrows among 340B reform advocates, staking out positions that seem less designed to deliver on transparency and accountability, and more aligned with profitability. Ted Okon, who serves as the executive director of the Community Oncology Alliance, and Dr. Lucio Gordan, a medical oncologist and hematologist with Florida Cancer Specialists & Research Institute, expressed their disagreement in a strongly worded op-ed published in The Wall Street Journal only days after ASCO’s announcement, which reads, in part:
“Expanding participation in a flawed program isn’t reform. It simply broadens access to the same distorted financial incentives that have fueled consolidation, higher costs and migration of cancer care into more expensive hospital settings.”
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| Photo Source: The Wall Street Journal |
One ASCO’s “new” positions involve the proliferation of child sites—standalone locations affiliated with a larger healthcare provider but not on its main campus.
In its statement, ASCO asserts that, “Independent oncology practices with multiple locations should be able to register a child site for the 340B program if they bill under the same Tax ID number as the eligible parent practice.”
The problem with this is that child sites are not always located in areas that serve the populations that 340B covered entities are obligated to serve: lower-income, uninsured, and underinsured patients.
For example, Bon Secours Mercy Health’s Richmond Community Hospital in Richmond, VA, closed its intensive care unit in 2017, yet it still managed to have the highest profit margins of any hospital in Virginia. While cutting services and supplies, former Bon Secours executives, doctors, and nurses accused the company of reaping the 340B revenue profits from communities like Richmond and reinvesting them in wealthier—and Whiter—communities (Thomas & Silver-Greenberg, 2022).
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| Photo Source: ADAP Advocacy |
Proving this, however, is difficult when it comes to hospital systems, as there are zero public reporting requirements for 340B revenues for hospitals, and it becomes even more labyrinthine when 340B eligibility is extended across child sites.
ADAP Advocacy argues that each child site should be able to prove its eligibility on its own merits, without those revenues being redirected to a larger organization that can then redistribute those funds to areas outside the 340B remit.
Another area where ASCO runs its transparency argument afoul relates to its call to allow unlimited numbers of contract pharmacies:
“Covered entities should be able to contract with multiple pharmacies, with caps on administrative fees, to support rural and underserved areas and ensure savings are preserved for patient care.”
The recent explosion in the number of covered entities and contract pharmacies has exacerbated the issue of manufacturers encountering duplicate discounts. Duplicate discounts occur when drugs provided to Medicaid beneficiaries (i.e., patients) are subject to discounted prices under the 340B program and are also eligible for Medicaid rebates—when drug manufacturers pay rebates to states as a condition for the federal contribution to Medicaid spending for the manufacturers’ outpatient drugs (Nguyen & Suresh, 2024). This overlap means manufacturers risk providing duplicate discounts when they are legally required to provide either a 340B program drug price or a rebate to state Medicaid programs (Health Resources & Services Administration, 2020).
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| Photo Source: HRSA | Paul Shank |
To combat this risk, the U.S. Department of Health and Human Services (HHS) and CMS created the Medicaid Exclusion File (MEF)—a list of covered entities that use 340B drugs for Medicaid beneficiaries under the Fee-For-Service (FFS) model. Once registered on the MEF, covered entities must notify the agency if they intend to use 340B drugs for Medicaid beneficiaries, and states then exclude claims from those registered providers from their rebate invoices to manufacturers.
The problem, however, is that the MEF applies only to FFS Medicaid models, and not to Medicaid MCOs. Unlike FFS models, which are based on reimbursement for individual services, MCOs are generally paid under a capitated model that pays each plan a set amount per beneficiary each month. As states increasingly contract with MCOs to manage their state Medicaid benefits, the expansion of drug dispensing by contracted pharmacies under the MCO model makes it more difficult for states to identify patients covered by MCOs and to track whether a 340B-discounted drug was dispensed to those patients (Nguyen & Suresh, 2024).
In addition to these changes, ASCO also proposes a new eligibility formula, called the Indigent Care Ratio (ICR). This ratio, they argue, would allow 340B eligibility to be extended to community-based, non-hospital-affiliated providers, such as independent oncology practices:
More than half of Americans receive cancer care in community-based oncology practices,” said Dr. Small. “These practices form the backbone of cancer care delivery in many rural and underserved areas, where they are often patients’ only access to such care (ASCO, 2026).
Using an ICR, ASCO argues, would allow practices to meet a specific threshold for providing care to Medicaid, uninsured, and dual-eligible patients. While the ICR makes sense in theory, its impacts definitely need further study before any implementation. ADAP Advocacy is concerned that this proposed formula, like most other formulas designed to expand access under the 340B Program, will run amok by entities trying to scheme profitability. It could further compound an existing problem by driving up the cost of cancer care, as “the current financial incentives within the 340B program may be driving higher utilization of specific outpatient medications” (Access Forum, 2026).
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| Photo Source: American Journal of Managed Care |
There is significant overlap in advocacy values and policy priorities between the HIV and oncology patient communities, fostering greater collaboration. It has led to greater alignment on key issues, such as protecting Medicare’s six protected classes, outlining concerns about the adverse impact of Medicare’s Drug Pricing Negotiation Program on patient access, and reforming the 340B Program. In each case, that alignment has maintained one paramount priority: patients. Sadly, ASCO’s revised 340B priorities fall outside of that patient-first priority.
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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.
References:
[1] Access Forum. (2026, February 15). The Hidden Cost of 340B: How Drug Pricing Programs Impact Cancer Care. https://theaccessforum.org/learning-hub/the-hidden-cost-of-340b-how-drug-pricing-programs-impact-cancer-care/
[2] American Society of Clinical Oncology. (2026, May 05). ASCO Updates Policy Statement on 340B Drug Pricing Program. Alexandria, VA: American Society of Clinical Oncology: News & Initiatives: Policy New Analysis. https://www.asco.org/news-initiatives/policy-news-analysis/asco-updates-policy-statement-340B-drug-pricing-program
[3] Health Resources and Services Administration. (2020, July). Duplicate Discount Prohibition. Washington, DC: United States Department of Health and Human Services: Health Resources Services Administration: 340B Drug Pricing Program: Program Requirements: Duplicate Discount Prohibition. https://www.hrsa.gov/opa/program-requirements/medicaid-exclusion
[4] Nguyen, T. & Suresh, R. (2024, March 04). What You Need to Know About 340B Duplicate Discounts. Washington, DC: Edgeworth Economics: The Antitrust Prescription. https://www.edgewortheconomics.com/antitrustprescription-340B-duplicate-discounts
[5] Okon, T. & Gordan, L. (2026, May 15). Expanding 340B Won’t Fix a Broken System. The Wall Street Journal. https://www.wsj.com/opinion/expanding-340b-wont-fix-a-broken-system-8c621229?st=BPngEs&reflink=desktopwebshare_permalink
[6] Thomas, K. & Silver-Greenberg, J. (2022, September 24). How a Hospital Chain Used a Poor Neighborhood to Turn Huge Profits. New York, NY: The New York Times: Health. https://www.nytimes.com/2022/09/24/health/bon-secours-mercy-health-profit-poor-neighborhood.html
