Tom Oliverson, representative for Texas House District 130, stated on April 29 that the state should bring more transparency to the 340B Drug Pricing Program, citing concerns about its impact on the pharmaceutical supply chain and its benefits to certain pharmacies, as similar debates regarding 340B grow in California.
“We are going to bring transparency to 340B in Texas next year and I will gladly lead the charge. This program is like legalized piracy that harms everyone in the pharmaceutical supply chain from manufacturer to patient, except for the 340B pharmacy, who rakes in hundreds of millions of dollars from the scheme,” Oliverson stated on X.
The 340B program requires drug manufacturers to sell outpatient drugs at discounted prices to eligible safety-net hospitals and clinics. It was designed to help providers serving low-income and uninsured patients stretch limited resources, but the program does not require discounts to be passed directly to patients or savings to be used for specific services. Peer-reviewed commentary has raised concerns about limited transparency, rapid program growth, contract pharmacy expansion, and whether savings consistently translate into measurable patient benefit.
California’s 340B hospitals have 3,514 contracts with 340B pharmacies, including 40% with out-of-state pharmacies. AIR340B’s California profile lists 79% of California 340B hospitals as providing below-average levels of charity care, with Stanford Health Care devoting 0.2% of operating costs to charity care. The profile also says California 340B hospitals generate 3.6 times more in 340B profits than they spend on charity care.
The topic has drawn attention from policymakers. At an October 2025 Senate HELP Committee hearing, Chairman Bill Cassidy said the 340B program had “ballooned with limited oversight,” raising questions about how revenue is used and whether it directly benefits low-income patients. Cassidy said program growth is tied to higher health care costs, and pointed to concerns involving contract pharmacies, hospital consolidation, duplicate discounts, and weak transparency requirements.
Julie Gill Shuffield, Executive Director of Patients Come First California, said 340B’s “lack of transparency” has allowed large hospitals and insurers to benefit from discounts intended for vulnerable patients. She said that “savings do not reach patients,” with some hospitals buying deeply discounted drugs and charging patients and insurers higher prices while retaining the difference.
Tom Oliverson is a Texas state representative for House District 130 and a physician anesthesiologist. He serves in the Texas House of Representatives and has focused on health care policy and insurance-related issues.
