New Study Exposes Geographic Inequities in 340B Program Benefits

For years, the 340B Drug Pricing Program has been hailed as a vital safety net—providing discounted medications to hospitals and clinics that serve low-income and medically underserved populations. But a new study published earlier this month is raising eyebrows and sparking debate by suggesting that many of the financial benefits of 340B are now flowing disproportionately to hospitals in wealthier areas.

The findings have reignited conversations around the original purpose of the program—and whether the system is still delivering on its promise to help the communities that need it most.

The Study: What It Found

The peer-reviewed study, conducted by a group of healthcare economists and public policy researchers, examined data from over 2,000 hospitals nationwide. Their conclusion: while many hospitals use 340B savings to reinvest in patient care, a growing number of hospitals located in higher-income zip codes are generating significant profits from the program.

Even more concerning, the study noted that hospitals in wealthier communities often had greater access to infrastructure and legal teams that helped them maximize their 340B participation—especially through the use of contract pharmacies and specialty pharmacy networks.

Meanwhile, hospitals in rural and underserved communities faced more restrictions, fewer resources, and limited access to external pharmacies—leaving them unable to tap into the same level of 340B-related revenue.

A Disconnect From the Program’s Intent?

The 340B program was established in 1992 with a clear mission: help hospitals and clinics “stretch scarce federal resources” to provide care for patients who might otherwise fall through the cracks.

But as healthcare systems have grown more complex, critics argue that some organizations are leveraging the program more for margin optimization than patient care. When facilities located in affluent areas generate significant revenue from discounted drugs—without clear reinvestment into vulnerable populations—it raises tough questions:

• Should there be more oversight on how 340B savings are used?

• Do current eligibility criteria reflect modern healthcare delivery?

• Is it time for Congress to revisit and refine the structure of the program?

What Hospital Leaders Are Saying

Not surprisingly, the study’s release has drawn mixed reactions.

Some hospital executives in higher-income areas argue that 340B savings still play a critical role in maintaining system-wide services like behavioral health, outpatient clinics, and community health outreach—many of which operate at a loss.

On the other hand, rural hospitals—especially those struggling under restrictive pharmacy access policies—say the program is becoming increasingly imbalanced.

“We’re seeing the same rules apply, but they benefit others more,” said a CEO of a critical access hospital in the Midwest. “340B was meant to level the playing field. Now it feels like we’re all playing the same game, but some of us are starting on third base.”

Why This Study Matters

What sets this report apart from past critiques is its granular geographic analysis and focus on disparities in access to 340B revenue, not just overall misuse. That adds new weight to the argument that reform may be needed—not necessarily to dismantle the program, but to rebalance it so that the original mission doesn’t get lost in a sea of contracts and profit margins.

Already, policy groups and federal advisors are pointing to the study as a reason to revisit how hospitals qualify for 340B and whether reporting requirements should be strengthened to ensure transparency in how savings are spent.

The Takeaway

This latest study doesn’t suggest the 340B program isn’t working—it’s a call to refocus it. The data highlights that while many covered entities are using 340B as intended, others may be benefiting in ways that don’t align with the spirit of the law.

With national attention once again turning to the program’s structure and impact, providers may want to consider proactively showcasing how they use 340B savings to support patients. Transparency and accountability may be the key to defending 340B in a changing political and economic climate.

As always, we’ll continue monitoring this story and what it means for covered entities across the country. Stay tuned for updates on proposed reforms, compliance strategies, and advocacy opportunities.