Adam Fein, president of Drug Channels Institute, said that the federal 340B program is projected to reach $81.4 billion in discounted purchases next year. He attributed this growth more to an increasing number of participating entities than to rising drug prices and called for reforms from the Centers for Medicare & Medicaid Services (CMS) and the Inflation Reduction Act to ensure proper use of funds – an issue attracting growing scrutiny in California.
“Discounted purchases under the 340B program reached a record $81.4 billion—an astounding $15.1 billion (+23%) higher than 2023,” said Adam J Fein. “340B has quietly become one of the largest single sources of manufacturer discounts in the U.S. drug channel. Yet, no one knows where the funds go, which patients benefit, or if the funds are being used properly. hospitals routinely hide behind FQHCs and other grantees whenever anyone broaches the topic of modernizing or updating the 340B program.”
According to a Drug Channels blog post by Fein, the expansion of the 340B program in 2024 is primarily due to increased utilization by covered entities, particularly hospitals, which account for 87 percent of purchases. The analysis anticipates that CMS oversight and provisions from the Inflation Reduction Act will introduce necessary constraints and disclosure requirements starting in 2026.
National data indicates that while revenue from the 340B program grew by 374 percent from 2013 to 2021, the vulnerable patient population it serves decreased by nearly half during the same period. This discrepancy suggests that program benefits may not be adequately reaching low-income and uninsured individuals as intended. Reforms could help realign the program with its original safety-net objectives.
Pioneer’s 2025 sheet reports 51% of CA contract pharmacies “intended to serve poor patients” are in affluent neighborhoods, and 6.4% are outside California; it lists 1,345 total hospital contract pharmacies. It also states CA 340B hospitals provide 1.26% charity care vs 2.15% national, and highlights Stanford Health Care at 0.22% charity care, a commonly cited mismatch between discounts and community benefit.
Fein holds a doctorate from the Wharton School of the University of Pennsylvania and leads Drug Channels Institute, an HMP Global company focused on pharmaceutical economics. Since 2006, he has authored the Drug Channels blog, providing detailed commentary on drug pricing, distribution, and policy. Fein is recognized as a prominent speaker and consultant in healthcare.
