A report from the Pioneer Institute and CancerCare finds that hospitals participating in the 340B drug discount program spend less on charity care than similar nonprofit hospitals that do not participate. Using CMS cost data from the first quarter of 2025, the analysis says 340B hospitals devoted 2.16% of operating expenses to free or discounted care for low-income patients, compared with 2.82% at non-340B hospitals. The gap was wider for care targeting uninsured patients: 1.6% versus 2.26%.
The 340B program lets qualifying safety-net providers buy outpatient drugs at discounts of 25% to 50%, and hospitals keep the savings. Critics have long argued that some hospitals use the program to boost profits rather than help vulnerable patients. The new report joins that criticism, saying a program intended to strengthen the safety net should show measurable benefits for patients. It calls for auditable reporting of 340B revenue and a rule requiring 340B hospitals to provide more charity care than non-340B hospitals.
The American Hospital Association pushed back, saying the report is misleading and that charity care is only one way hospitals support their communities. An AHA official pointed to nearly $100 billion in total community benefits from 340B hospitals, including behavioral health clinics, diabetes counseling, and food banks. The dispute comes as lawmakers and the Trump administration weigh changes to the program, including rebate models and stricter eligibility rules, though past reform efforts have stalled in court.