Hospital use of drug discount program needs accountability

Published 1:30 am Friday, February 27, 2026

Claims by big hospital systems that the 340B Drug Pricing Program is “doing exactly what Congress intended” (“Comment: Hospitals staying true to Congress’ drug discounts,” The Herald, Feb. 14) ignore the facts here in Washington state. Congress designed 340B to help vulnerable patients, including those living with HIV, viral hepatitis, cancer and other chronic conditions get access to affordable medications; not to let profits flow unchecked to large tax-exempt hospitals.

Where’s the proof that patients are actually benefiting? Big hospital systems aren’t required to say what they do with 340B profits; and they don’t.

Washington 340B hospitals earn nearly three times more in 340B profits than they spend on charity care. They also significantly mark up prices for physician-administered drugs which contributes to higher insurance premiums.

When hospitals purchase drugs at discounted 340B rates but are reimbursed at full price, the result is higher overall spending across the system. In Washington, growth in 340B hospital and grantee participation between 2014 and 2021 was associated with nearly a $400 increase in annual Medicaid (Apple Health) spending per enrollee.

For people living with HIV, higher costs in Medicaid leads to instability in care.

Adding to the problem, nearly half of 340B hospital contract pharmacies are in affluent Washington neighborhoods, not the vulnerable communities the program was intended to serve.

Congress designed 340B to help patients, not pad hospital bottom lines. Yet, SB 5981 would allow the program to continue operating with no guardrails. 340B needs transparency, accountability, and reforms that put patients first.

Ryan Carpenter

Community Access National Network

Seattle