WASHINGTON, DC, July 27, 2026 -- ADAP Advocacy today called for oversight of the embattled 340B Drug Pricing Program to be moved from the Health Resources and Services Administration (HRSA) to the Centers for Medicare and Medicaid Services (CMS) to address longstanding gaps in regulatory and enforcement action. The argument for reforming the 340B Program—now the second-largest federal prescription drug program in the United States, behind Medicare Part D—is that it has veered from its original legislative intent by prioritizing provider interests over patient interests. ADAP Advocacy endorsed the oversight shift in its recent policy paper, "340B Program: The Glue That Should Hold Our Healthcare System Together", which recognizes a robust program as a major part of the healthcare system, but outlines how its growth has outpaced the ability to clearly see how it is actually helping patients.
The 340B Drug Pricing Program, created in 1992 under section 602 of the Veteran's Health Care Act (P.L. 102-585), requires pharmaceutical companies to sell certain outpatient drugs to "Covered Entities," such as disproportionate share hospitals, hemophilia clinics, and Ryan White HIV/AIDS Program (RWHAP) providers, at significantly lower prices than the list price, and then furnish those entities with rebates amounting to the difference between the purchase price and the list price. Those covered entities are then statutorily required to reinvest those dollars into expanding access to patients with low incomes or who are underserved.
Brandon M. Macsata, CEO of ADAP Advocacy, stated. "For too long, the 340B Program has been allowed to grow unchecked without any transparency or meaningful regulation or enforcement of the statutory requirements. Unfortunately, HRSA has demonstrated over 34 years that they are simply unable to adequately ensure that covered entities are using the significant revenues they enjoy from 340B sales in ways that comport with either the spirit or the letter of the law."
According to HRSA, 340B drug sales in 2025 totaled over $100 billion, with purchases from hospitals accounting for over 79% of those purchases. While HRSA releases data on the total amount of 340B drug sales, only a few covered entity types, such as RWHAP providers, are required to disclose the total revenues received from those purchases and how those revenues are spent.
Marcus J. Hopkins, ADAP Advocacy's Lead Health Policy Consultant, echoed: "At a time when both access to and the quality of healthcare services for rural and poor Americans are being sacrificed for being too costly and not generating enough revenue, the very least that covered entities can and should be required to do is disclose how the 340B revenues they receive are being spent. There is a fundamental disconnect between the intent of the 340B statute—to reinvest those funds into expanding access and affordability to patients in need—and the belief by many covered entities that they are entitled to use those revenues however they see fit with zero oversight."
ADAP Advocacy's most recently published research, which examined 98 hospitals that reported charity care expenditures on the federal Form 990s, found that just 27 340B hospitals increased the provision of charity care—healthcare services provided at no cost to patients—as a percentage of annual revenues after becoming eligible for the 340B Program, while 41 hospitals saw decreases of 50% or greater.
"At this point, it is abundantly clear that CMS has both the regulatory and enforcement experience and staffing necessary to rein in the many bad actors within the 340B Program, no matter how well-funded their lobbying arms may be. When hospital CEOs literally tell members of Congress that they 'will not comply' with any transparency standards they might implement, it's time for substantive change," further stated Macsata.
To learn more about ADAP Advocacy or the 340B Drug Pricing Program, please email info@adapadvocacy.org.
The ADAP Advocacy mission is to promote and enhance the AIDS Drug Assistance Programs (ADAPs) and improve access to care for persons living with HIV/AIDS. ADAP Advocacy works with advocates, community, health care, government, patients, pharmaceutical companies and other stakeholders to raise awareness, offer patient educational programs, and foster greater community collaboration.