340B: The Glue That Should Hold Our Healthcare System Together

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

In June 2026, ADAP Advocacy released its latest policy paper—340B Program: The Glue That Should Hold Our Healthcare System Together—focusing on the explosive growth of the 340B Program from just 1,000 covered entities (CEs) and 503 contract pharmacies (CPs) in 1992 to over 53,000 CEs and 34,840 CPs in 2024. In addition to examining this growth and its causes, ADAP Advocacy also provided concrete recommendations to ensure the 340B Program can function in perpetuity (Macsata, et al., 2026). The policy paper is the latest in a series supporting the organization's argument that the 340B Program is too big to fail.

Source: ADAP Advocacy

ADAP Advocacy argues that, because the 340B Program spans more than 42,000 healthcare organizations and 32,000 pharmacies, it should be the glue that holds our healthcare system together. Instead, the 340B program has essentially become a slush fund for unscrupulous CEs—primarily hospitals—that lines executives’ pockets while cutting corners, costs, and services for both staff and patients. That’s not to suggest the program isn’t vitally important, or that there aren’t plenty of good actors…CEs…in the 340B space, because it is, and there are. The fact of the matter is a healthcare program of this size and magnitude cannot be entrusted to good faith alone; rather, improved transparency guardrails are needed to ensure its success and ultimately its intended beneficiaries: patients.

Primary Drivers of Growth:

ADAP Advocacy identified several key drivers of growth in the 340B program, including:

• The expansion of eligibility categories;
• The expansion of large health systems;
• The growing utilization by CEs of off-site clinics and child sites; and
• The explosive growth of Pharmacy Benefit Managers (PBMs) and contract pharmacies operating in the American healthcare space as third-party administrators for CEs

Policy Proposals

ADAP Advocacy also recommended several policy proposals to address the myriad issues facing the program, including:

• The implementation of a program-wide rebate model, in which drugs are purchased at full price up front, and rebates are provided by manufacturers at a later date;
• The consideration of a rebate “sales draw” under the program-wide rebate model that accounts for agencies with smaller annual operating revenues (e.g., those with less than $2 million);
• Mandatory reporting requirements for CEs, including how revenues have been used to improve patient care, reduce drug costs, or expand community services;
• Clearly defining “patient” in the statute—who qualifies as a patient, and which purchases qualify for 340B rebates; and
• Establishing an enforcement mechanism with real teeth and penalties ranging from civil monetary penalties to loss of 340B eligibility.

Each proposal is designed to ensure 340B revenues are used for patients in need, as intended by those who created the program. And these changes are long overdue.

Source: ADAP Advocacy | iStock

In 2025, 340B drugs exceeded $179.5 billion in list prices, with hospitals as the biggest cost driver (Martin et al, 2026). The 340B Program is immensely significant, and rising waste, fraud, and abuse pose an increasing risk. Because the American healthcare system is highly interdependent, a weakness in one sector can have widespread repercussions, making the 340B Program's impact especially important. 

Research published in September 2026 by the Pioneer Institute found that hospitals participating in the 340B Program spent an average of just 2.16% of their operating expenses on charity care, compared to 2.82% at non-340B hospitals. It also found that 340B hospitals spent just 1.6% of operating expenses on care for uninsured patients, compared with 2.26% at non-340B hospitals (Popovian et al., 2026).

Popovian et al. are quick to point out that their findings do not suggest that participating in the 340B Program “causes” hospitals to provide less charity care or care at cost; rather, their findings demonstrate that the 340B Program’s drug discounts, savings, and revenues do not reliably translate into providing more help for patients (either in terms of healthcare provision or lower costs), and that current reporting requirements are insufficient to ensure that 340B revenues are being appropriately utilized in ways that comport with either the letter or intent of the statute.

Source: Pioneer Health

Last month, ADAP Advocacy launched a national advocacy campaign focused on the data and findings of its most recent 340B white paper, including infographics, social media posts, op-eds, and video content. The campaign is patient-centric in that it informs patients, regardless of their chronic health condition or rare disease, why they can no longer sit on the sidelines and watch the pharmaceutical industry and big hospital systems duke it out over what is in our best interest. Nothing about us, without us!

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.

References:

[1] Macsata, B. M., Anthony, G., Hopkins, M. J., Sosa, J. (2026, June). 340B Program: The Glue That Should Hold Our Healthcare System Together. Nags Head, NC: ADAP Advocacy: Policy Center: 340B: Policy Papers. https://www.adapadvocacy.org/s/2026_ADAP_Project_RW_340B_Asset_32_340B_Glue_Should_Hold_Healthcare_Together_061526.pdf

[2] Martin, R., Karne, H., Zen, S. (2026, June), The Size and Growth of the 340B Program in 2025. IQVIA. https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2026/iqvia-size--growth-of-340b-in-2025-white-paper-2026.pdf

[3] Popovian, R., Sydor, A. M., Czubaruk, K., Walker, M., & Smith, W. (2026, September 24). The 340B Accountability Gap: Charity Care, Uncompensated Care, and Medicaid Patient Volume Among 340B and Non-340B Hospitals: What the Data Mean for 340B Accountability and Reform. Boston, MA: The Pioneer Institute: Pioneer Health. https://pioneerinstitute.org/wp-content/uploads/2026/09/2026-09-08-Cancer-Care-340B-Paper.pdf