Public Policy Solutions has issued a call for reform of the federal 340B Drug Pricing Program, citing financial strain on state budgets and misaligned incentives for nonprofit hospitals and contract pharmacies. The announcement was made on the social media platform X.
The 340B Drug Pricing Program, established in 1992 and administered by the Health Resources and Services Administration, allows eligible healthcare entities to purchase outpatient drugs at reduced prices to support care for underserved populations. It is designed to help providers stretch limited federal resources. Covered entities include hospitals, health centers, and specialized clinics that meet federal eligibility criteria.
A 2023 analysis by Dan Crippen, former Director of the Congressional Budget Office, estimated that the 340B program reduces state and federal tax revenues by as much as $17 billion annually. This includes $3.5 billion in lost revenue at the state and local levels. Crippen also estimated that the total value of 340B discounts reached $70 billion in the previous year.
According to a report from PhRMA (Pharmaceutical Research and Manufacturers of America), California’s 340B program has seen significant growth, with hospitals in the state maintaining numerous partnerships with pharmacies. As of 2025, there are over 3,500 contracts between 340B hospitals and pharmacies in California, with approximately 40% involving out-of-state pharmacies. This trend has sparked discussions about the program’s alignment with its original intent.
Public Policy Solutions is a 501(c)(4) organization focused on advancing or opposing federal and state policies based on principles such as free markets, constitutional governance, and taxpayer respect. It is led by Joe Grogan, former White House Domestic Policy Advisor, and John “CZ” Czwartacki, former Chief Communications Officer at the Consumer Financial Protection Bureau. The organization analyzes and advocates for reforms on high-impact legislation and regulatory matters.
