Sen. Cassidy Shines Spotlight on 340B Program, Furthering Calls for Reform

By: Ranier Simons, ADAP Blog Guest Contributor, and Marcus J. Hopkins, ADAP 340B Consultant

So far in 2025, state legislatures nationwide witnessed a flurry of legislation on the 340B Drug Pricing Program. Just over one hundred 340B-related bills were introduced in this legislative session (Ingmire, 2025). A handful can be characterized as genuine reform efforts. Still, most are “gimmes” to the powerful hospital lobby, designed to expand the program without any guardrails or guarantees that patients will benefit. Billions of dollars and ultimately patients’ welfare are at stake, which is why Senator Bill Cassidy recently released a report on the 340B Program. The report, focused on stronger accountability and transparency, culminates a year-long inquiry by the powerful Senate Health, Education, Labor, and Pensions (HELP) Committee. The report echoes the growing chorus calling for long-overdue reforms.

Sen. Bill Cassidy | Photo Source: End Points News

Aside from special interests representing the reform denialists, reactions to the report’s findings have been cheered and represent momentum toward something finally being done to return the program to its legislative intent. Senator Cassidy states, “This investigation underscores that there are transparency and oversight concerns that prevent 340B discounts from translating to better access or lower costs for patients. Congress needs to act to bring much-needed reform to the 340B Program” (HELP, 2025).

The 30-year-old 340B program has ballooned more than 600% since 2000, with over 60,000 participating covered entities (Olsen, 2025). The program was created to enable providers, known as ‘covered entities’ (CE), serving large populations of low-income individuals to purchase brand-name and generic medications at a considerable discount and use the savings to provide increased care to patients and lower their costs. Presently, the designation of CE encompasses six different categories of hospitals and ten categories of non-hospital entities (340B, n.d.). Drug manufacturers have to offer the drugs at a discount under the 340B program as a condition of participating in the Medicare Drug Rebate Program. 

As a result of the growing number of participants, many stakeholders are alarmed because the program seems not to result in increased care and lowered costs for low-income and uninsured patients as initially intended. Senator Cassidy’s investigation comprised information requests of eight of the most prominent 340B participants from several categories: two hospital-covered entities, two FQHCs, two contract pharmacies, and two drug makers (Muoio, 2025). What follows is an overview analysis of the Cassidy Report.

Photo Source: Senate HELP Committee

The investigation found that:

• Neither Bon Secours Mercy Health (Richmond Community Hospital in Richmond, VA) nor the Cleveland Clinic (Cleveland, OH)—the two hospital systems examined by Senator Cassidy’s office—pass on 340B savings directly to patients. Both hospital systems stated that the 340B legislation does not require them to do so. While both systems have sliding scale payment programs for patients based upon their annual incomes as a percentage of the Federal Poverty Level (FPL) that allow patients to pay smaller percentages of the costs of services, both systems responded that they are not required to pass “dollar-for-dollar” savings on to patients.

• Neither Bon Secours nor the Cleveland Clinic accounts for 340B revenues or savings in their operating budgets. Both reported sentiments that “340B revenues are revenues like any other” and did not feel obligated to allocate or earmark 340B revenues for specific purposes. Instead, both hospitals treat those revenues as part of general funds and that they can be used for any purpose they see fit. This sentiment aligns with sentiments expressed by other hospital systems in previous congressional hearings.

• Of the two Federally Qualified Health Centers (FQHCs) examined by Senator Cassidy’s office, both Sun River Health and Yakima Valley Farm Workers Clinic generated a majority of their 340B revenues from a single class of drugs—HIV/AIDS medications, which accounted for more than 54% of their 340B revenues at Sun Valley, and drugs to treat diabetes, which accounted for nearly 45% of 340B revenues at Yakima.

• Both FQHCs leveraged their 340B revenues to provide significant discounts on medications dispensed to patients whose incomes fell below 200% of the FPL.

• CVS Health and Walgreens, the two contract pharmacies and third-party administrations examined by Senator Cassidy’s office, initially refused to provide the documents requested by the office and only did so after extended negotiations.

• Both companies charge significant and increasing fees related to the provision of pharmacy dispensing and 340B third-party administrator (TPA) services. The covered entities that contract with them indicated that these increasing fees are straining their resources.

• The pharmaceutical companies that provide billions of dollars in discounts to covered entities under the 340B Program have significant concerns about the integrity of the program, with Eli Lilly and Amgen both arguing that the lack of transparency that currently exists with most covered entity types allows for covered entities, contract pharmacies, and third-party administrators to too easily manipulate, misuse, and abuse a program that was designed to increase access to care.

• Both Eli Lilly and Amgen reported significant increases in sales to contract pharmacies, rather than hospitals and grantees.

Photo Source: ADAP Advocacy

The Cassidy Report comes as ADAP Advocacy launched its national advocacy campaign, calling for reforms to the 340B Program. The campaign was kicked off with a new commercial that asks the question, Is the 340B Drug Pricing Program the Next 'Too Big to Fail'? The commercial will air in the greater metropolitan DC market while Congress is in session, and it provides plenty of fodder for lawmakers to appreciate the need to move on the report.

Ultimately, Senator Cassidy’s office recommended five changes to the 340B Program:

• Requiring covered entities to provide detailed annual reporting on how 340B revenue is used to ensure direct savings for patients, providing a more transparent link between program savings and patient benefit;

• Addressing potential logistical challenges caused by increased administrative complexity, leading to burdens that may impede patients from benefiting from the program;

• Investigating the types of financial benefits contract pharmacies and TPAs receive for administering the 340B Program to ensure that increasing fees do not disadvantage covered entities and patients;

• Requiring transparency and data reporting for entities supporting participants in the 340B Program (i.e., contract pharmacies and TPAs); and

• Providing clear guidelines to ensure that the manufacturer discounts actually benefit 340 B-eligible patients, including examining legislative changes to the definition of eligible patients.

Advocacy groups such as ADAP Advocacy, Community Access National Network, and The Alliance to Save America's 340B Program (ASAP 340B) are supportive. Cassidy’s report findings align with the work of ADAP Advocacy’s 340B Patient Advisory Committee over the last two years. In a press release, Brandon M. Macsata, CEO of ADAP Advocacy, summarized: “In 2019, ADAP Advocacy endorsed the Community Access National Network 340B Commission’s final report calling for long-overdue accountability and transparency standards to improve the 340B Program, among them clearly defining who are 340B patients, and how 340B covered entities should utilize their 340B savings to improve patient access to care and services. Senator Cassidy has laid a path to reform this vital program, and ADAP Advocacy looks forward to working with him on this important issue.” 

ASAP 340B issued a statement in support of Senator Cassidy’s work. In the release, Thomas Johnson, Executive Director of ASAP 340B, states, “This report details how large hospital systems, PBMs, and corporate middlemen take advantage of the program – it is clear the time for meaningful reform is now. We strongly urge Congress to enact legislation that realigns the 340B program in the interest of true safety-net providers and the patients and communities they serve.”

Conversely, and not surprisingly, there were some opposing viewpoints from hospital stakeholders. For example, 340B Health, a lobbying group representing over 1500 hospitals and health systems in the 340B program, expressed concern about the report. In a statement, 340B Health stated it had “concerns with several aspects of the report that may not fully reflect the purpose or implementation of 340B” (Muoio, 2025). Maureen Testoni, 340B Health’s president and CEO, also emphasized that the language of the 340B statute names ‘cost of operations’ reductions as one of the program's primary goals. She implied that using 340B savings to fund capital improvements and community benefits was a way to benefit low-income patients (Muoio, 2025). However, that sentiment is one of the concerns heralded by proponents in favor of 340B reform. Passing savings on to patients and improving their care is the impetus behind the 340B program. Capital improvements do not benefit patients directly, especially when improvements involve facilities that do not serve needy communities.

Photo Source: Drug Channels Institute

Leading biopharmaceutical experts, critical of the reform denialists' claims that the program isn't warped, pointed to the Cassidy Report to highlight glaring problems that only seem to be getting worse. For example, Adam J. Fein, Ph.D., with the Drug Channels Institute, published an analysis: "Follow the 340B Dollar: Senator Cassidy Exposes How CVS Health and Walgreens Profit as 340B Contract Pharmacies." Likewise, Matt Toresco pointed to the report, asking: "340B: Safety Net or Profit Engine?"

Although Senator Cassidy’s report involves a small sample of 340B entities, it is still an informed and enlightening cross-section of the 340B landscape and the needs for reform. Urging Congressional 340B reform actions can help bolster state legislative actions addressing the misuse of the program in hopes of refocusing the benefit on patients. Some covered entities effectively pass savings on to patients; however, many do not. Senator Cassidy has a long history of being active in healthcare reform, and this report is a salient foundation for continued efforts.

[1] 340B Health. (n.d.) 340B Drug Pricing Program Overview. Retrieved fromhttps://www.340bhealth.org/members/340b-program/overview/#:~:text=The%20340B%20ceiling%20price%20is,over%2Dthe%2Dcounter%20drugs.

[2] Ingmire, B, (2025, May 1). The Evolving Landscape of 340B Drug Pricing Laws. Retrieved from https://www.multistate.us/insider/2025/5/1/the-evolving-landscape-of-340b-drug-pricing-laws

[3] Muoio, D. (2025, April 24). Cassidy calls for 340B reform, increased oversight of hospitals, contract pharmacies. Retrieved from https://www.fiercehealthcare.com/regulatory/sen-cassidy-releases-340b-report-recommending-greater-transparency-oversight-hospitals    

[4] Olsen, E. (2025, April 28).Top Republican calls for 340B reform in long-awaited investigation. Retrieved from https://www.biopharmadive.com/news/bill-cassidy-help-committee-340B-reform-investigation/746405/

[5] U.S. Senate Committee on Health, Education, Labor and Pensions (HELP). (2025, April 24). Chair Cassidy Releases Report on 340B Reform, Calls for Congressional Action. Retrieved from https://www.help.senate.gov/rep/newsroom/press/chair-cassidy-releases-report-on-340b-reform-calls-for-congressional-action

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.  

Congress is Knocking on 340B's Door, Saying "Show Me the Money"

By: Ranier Simons, ADAP Blog Guest Contributor

Many members of society are adversely affected by inequalities stemming from diverse circumstances and socio-economic realities. Disparities in public health result from those inequalities. Policy is one avenue for improving the health of those in need. One policy response by Congress was the creation of the 340B Drug Pricing Program as part of the bipartisan Veterans Healthcare Act of 1992.[1] The 340B program allows qualifying safety-net providers and qualifying hospitals, otherwise known as covered entities, to purchase prescription drugs at significantly discounted prices from manufacturers and re-invest those dollars in expanding access to care and treatment. A growing chorus is concerned that the legislative intent of the program is being obfuscated by large hospital systems and mega service providers. 

Photo Source: USA Today

These covered entities serve low-income and vulnerable populations who are uninsured, on Medicaid or Medicare. The savings generated from the program are used to offer patients free or discounted drugs and provide many other services that meet the healthcare needs of the communities these entities serve.[1] Other services include prevention-focused primary care, mental healthcare, and substance abuse treatment. What started out as a good idea has evolved into a system where inefficiencies and abuses have corrupted 340B’s intent and harmed some patients. As a result, on a federal and state level, numerous pieces of 340B reform legislation have been introduced to stop abuses, protect patients, and overall ensure the program operates as intended.

One issue is the sheer number of covered entities taking advantage of the 340B discount pricing.[2] At the program's advent, safety-net hospitals, outpatient clinics, and community health centers were the first entities allowed to participate. Later, Congress expanded eligibility to add children’s hospitals, outpatient cancer center hospitals, rural referral centers, sole community hospitals, and critical access hospitals. Covered entities are supposed to serve large numbers of vulnerable community members by providing charity care and passing on savings. However, the lack of robust oversight and ambiguity in the 340B legislative language has allowed some entities to take advantage of the program. Some entities abuse the program by using the savings for profit instead of passing them on directly to patients or using them for services to serve them. Some entities participate in the program when they should not be qualified. Some larger hospitals do this by manipulating their business structures by acquiring smaller entities that qualify in the true spirit of the program.

Another significant issue is bad faith actions from some covered entities who are using 340B rebates to fund exuberant executive compensation, which is entirely made more egregious by the hospital systems simultaneously cutting their charity care for indigent patients.[3]

A notable piece of legislation recently introduced in Congress to affect 340B reform is a discussion draft bill entitled the ‘SUSTAIN 340B Act’ - which stands for ‘Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now’.[4] It was introduced by U.S. Senators John Thune (R-S.D.), Debbie Stabenow (D-Mich.), Shelley Moore Capito (R-W.Va.), Tammy Baldwin (D-Wis.), Jerry Moran (R-Kan.), and Ben Cardin (D-Md.), all members of the Senate 340B bipartisan working group. This bill is a comprehensive attempt at reform targeting many of the current weaknesses of the 340B program. It addresses multiple areas, such as transparency, contract pharmacy operations, program integrity, and accountability. 

Sen. John Thune | Photo Source: TIME

In one vein of accountability, this bill amends the current 340B legislation by defining parameters for what can be considered ‘child sites’.[4] Many covered entities operate more than one physical location. An example is a non-profit hospital that may have multiple clinics or service centers outside the main hospital where all entities are partaking of the 340B discount. This bill explicitly defines the operating relationships required to be considered a qualifying child site. This is necessary because many entities are improperly spreading their 340B privilege across outlets under their umbrella. 

Another accountability measure defined by the SUSTAIN 340B Act relates to reporting. Concerning patient and community benefits, the bill requires covered entities to show their proverbial ‘receipts’ and thus bringing some much-needed transparency to the program. The legislative verbiage mandates the reporting include data such as the financial demographics of covered entities served populations, specifics on how the 340B prescriptions utilized by patients improved their health, explanations of policies covered entities use to promote access and adherence to prescribed medication, and even detailed reporting of how the discounts received from the program are used.[4]

The legislation, in part, reads: “We believe that requiring covered entities to report detailed information regarding their program savings, policies, patient and prescription information, and then enabling that information to be publicly available by the Secretary will help ensure all stakeholders have trust and confidence that the program is being used as intended.”[4]

A more contentious part of the bill targets drug manufacturers. The bill specifically defines things that drug manufacturers cannot do. An example is where it explicitly states a drug manufacturer cannot impose a restriction on a covered entity as a condition to receive a discount, such as “…requiring the submission of claims data directly to the manufacturer out of submissions to the entity receiving the contract to maintain the clearinghouse under section 1150D of the Social Security Act.”[4] Most importantly, the bill defines prohibited activity, legal remedies, and monetary penalties that can be assessed if drug manufacturers break the rules.

The SUSTAIN Act also aims to enhance program integrity by implementing stronger guidelines for government audits of covered entities, preventing duplicate discounts by bad actors gaming the system between the 340B program and Medicaid, and reigning in health plans and pharmacy benefit managers attempts to restrict access to drugs in the 340B program.[4]

Dusty Garner, a long-time survivor of HIV and member of the ADAP Advocacy 340B Patient Advisory Group, passionately summarized: "Listen, it is about damn time Congress opened the books on this $54 Billion program and asked the corporate healthcare providers who are benefiting the most from it to do the same with their ledgers. Too many patients are drowning in medical debt, yet they're residing in areas with so-called nonprofit hospitals supposedly best suited for expanded access under the 340B Program. Where is all of this money going, cause we know too much of these 340B rebates aren't helping the patients who most need it."

Photo Source: CANN

Another less notable piece of legislation introduced was the ‘340B Pharmaceutical Access To Invest in Essential, Needed Treatments & Support Act of 2024’, known as the 340B PATIENTS Act.[5] It was introduced by Rep. Doris Matsui (D-Calif.), a known drug industry antagonist and a favorite of the American Hospital Association. Despite the legislation's short title, it appears to be more concerned with providers than patients. The 340B PATIENTS Act is not as comprehensive as the SUSTAIN Act. Its specific focus is to make amendments concerning contract pharmacy dealings and drug manufacturer enhanced reporting requirements. One section of the bill adds amended language to clarify that drug manufacturers are required to “offer 340B pricing for drugs purchased by a covered entity regardless of the manner or location in which the drug is dispensed, and section 340B prohibits drug manufacturers from placing conditions on the ability of covered entities to purchase and use 340B drugs, regardless of the manner or location in which they are dispensed.”[5]

Thomas Johnson, Executive Director of ASAP 340B, expressed sentiments concerning the 340B PATIENTS Act. He states, "While we welcome efforts to address 340B contract pharmacy arrangements, the 340B program needs comprehensive reforms that will restore its integrity and accountability and, most importantly, ensure underserved communities are benefiting. ASAP 340B was formed because nearly all stakeholders involved in the 340B program have grave concerns about its ability to serve the nation's safety net as was originally intended 30 years ago. Community Health Centers, patient, provider and consumer advocates, and leaders from the biopharmaceutical industry are at the table together, working with Congress on solutions that will go further to address the flaws in the 340B program currently putting America's safety net at risk."

Photo Source: ASAP 340B

The 340B program is a lifeline for covered entities and the communities they serve. Fighting to legislate its survival is imperative to improve the health and lives of those truly in need of its benefits. In a joint statement to the U.S. Senate Bipartisan 340B Working Group in response to a Request for Information, ADAP Advocacy and Community Access National Network perfectly described the dire need for reform. They explain: “When originally drafted, Congress did not include extensive parameters to govern the entities. This means that the statute is silent on many critical program requirements that are necessary for it to function correctly today, ensuring that patients, and not hospital networks, are seeing the benefit of discounted medicines. But it is now more than 20+ years later, and difficult to argue about what occurred then as compared to now. The challenge and the opportunity are to focus on what Congress wants the program to be today, who it should serve, what healthcare providers should be qualified as “covered entities,” etc.[6]

The current toxic political environment on Capitol Hill, which is exacerbated by the continued dysfunction in the House of Representatives, makes it highly unlikely anything gets done in Congress other than funding the government. But the introduction of 340B-specific legislation does demonstrate that the growing calls for reform of the 340B Program are finally being heard. The simple truth of the matter is the more patients learn about how the 340B Program could be better serving them rather than lining the pockets of corporate healthcare providers, they’re left asking: “340B: What about me?” Congress appears to be listening.

[1] HRSA. Sec. 340B Public Health Service Act. Retrieved from https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section-340b.pdf

[2] The Commonwealth Fund. (2022, September 8). The Federal 340B Drug Pricing Program: What It is, and why it’s facing legal challenges. Retrieved from https://www.commonwealthfund.org/publications/explainer/2022/sep/federal-340b-drug-pricing-program-what-it-is-why-its-facing-legal-challenges#:~:text=In%202015%2C%20the%20U.S.%20Government,left%20largely%20to%20police%20themselves.

[3] Hopkins, Marcus J.. (2023, November 2). 340B Covered Entities’ Revenue Witnessed Huge Executive Compensation Increases, Alarming Charity Care Decreases. The ADAP Blog Retrieved from https://adapadvocacyassociation.blogspot.com/2023/11/340b-covered-entities-revenue-witnessed.html 

[4].Thune, J., Stabenow, D., Moore, S., Baldwin, T., Moran, J., Cardin, B. (2024). SUSTAIN Act. Retrieved from https://www.thune.senate.gov/public/_cache/files/c3a678e3-12a5-4175-8a80-9246b76576ec/75E01A8968B679E3525395E2BB0CE7DB.ss340b-act-discussion-draft-.pdf

[5] Matsui, D. (2024, March 12). 340B PATIENTS Act. Retrieved from https://matsui.house.gov/sites/evo-subsites/matsui.house.gov/files/evo-media-document/MATSUI_022_xml_final.pdf

[6] ADAP Advocacy, Community Access National Network. (2023, July 23). Joint Statement. Retrieved from https://www.adapadvocacy.org/pdf-docs/2023_ADAP_CANN_Public_Comment_Senate_RFI_340B_07-24-23.pdf

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates. 

What’s Needed to Fix a Vital Drug Discount Program

By: Brandon M. Macsata, CEO, ADAP Advocacy Association & Guy Anthony, Founder & President, Black, Gifted & Whole Foundation

****Reprinted with permission from POZ****

Thirty years ago, when Congress passed the Public Health Service Act, no one could have imagined that section 340B of the law would become the lightning rod that it is today. The little-known provision created a program to help America’s safety net health care providers bring affordable care and discounted medicines to vulnerable, low-income patients. 

Photo Source: POZ | iStock

The initial concept was simple and effective. Pharmaceutical manufacturers provide steeply discounted drugs to hospitals, providers, and clinics that serve uninsured and underinsured patients living with HIV/AIDS, and safety net providers dedicated to reaching the most vulnerable and underserved communities. The support that the 340B program provided to Ryan White Clinics and hemophilia treatment centers was critical in addressing the HIV/AIDS crisis through the 1990s. Today, when people living with HIV can successfully manage the disease with highly effective therapies, it remains essential.

But the program and the true safety-net clinics that rely on it is teetering on the brink of collapse due to statutory silence in key areas. It turns out that the attraction of using significant savings on medicines to boost profit margins has been irresistible to some for-profit entities, at the expense of the safety net. The for-profit entities dipping into the 340B program’s discounted prescription drugs now include, among others, well-resourced hospitals in wealthier zip codes, pharmacy benefit managers (PBMs), and a vast network of contracted pharmacies (also largely located in wealthier zip codes). The numbers on this point speak volumes: 340B discounted drug purchases amounted to $38 billion in 2020, more than 15 times what it was in 2005. As Congressman Bucshon noted, wouldn’t you expect a 15x increase in the amount of charity care that is available in this country?

The realities of how the 340B program is currently implemented is a clear indication that stronger accountability and transparency are urgently needed so that the program can begin to work as intended, and patients don’t continue to get left behind. Abuses of the program have been exhaustively documented by government watchdogs and others including analysis by an advocacy group for cancer patients that found that hospitals are overcharging patients for a common breast cancer drug. The research found that hospitals pay a discounted price of just over $43,000 for a year’s supply of the drug,   while charging patients over $217,000 for the same medicine, reaping a profit of more than $173,000 from just one patient, thanks to the program designed to help the nation’s poorest citizens. 

Patients are bearing serious consequences from the lack of clarity in the 340B program and the loss of critical resources safety-net providers depend on. As organizations that provide essential services and education for the HIV/AIDS community, we know this program must be better defined if it is to work as intended. We also know that Congress has a central role to play in making that happen. 

We can only achieve changes that work in the interest of the safety net if the diverse 340B community works together, rather than at odds with itself. That’s where the newly-formed Alliance to Save America’s 340B Program (ASAP 340B) comes into play. The Alliance’s 10 policy principles provide a critical foundation for Washington decision makers to change the trajectory of the program and improve administration and oversight at the federal level. The Principles are designed to ensure greater transparency and accountability; determine a “patient definition” with with stronger safeguards; establish clear criteria for 340B contract pharmacy arrangements to improve access; prevent middlemen and for-profit entities from profiting off the 340B program; and update and strengthen 340B hospital eligibility requirements.

Photo Source: ASAP 340B

Inaction will – not could but will – very soon have serious ramifications on the care that our community receives. Yet despite the diverse organizations that have come to the table to bring about change, not everyone agrees. A cacophony of voices – including some from the HIV community – has expressed concern or displeasure with the idea of bringing ideas to the table that would enhance transparency, accountability, and most importantly, deliver long-time certainty to the program. But notably, no comprehensive, viable alternatives have been offered. 

Congress and the administration have made it clear that making prescription drugs more affordable should be a major public health priority. Fixing the 340B program can move the needle on that goal, bringing health care affordability to our nation’s most underserved patients and communities.

This opinion piece was also published on June 7th in POZ.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.