On February 10, 2026, Consumer Choice Centre published an analysis of the 340B Drug Discount Program by Fred Roeder, highlighting concerns about its current structure and suggesting possible reforms, an issue of increasing relevance in New Jersey.
The analysis outlines how the program, originally intended to help hospitals and clinics support patients in need by allowing them to purchase medicines at lower prices, has grown more complex over time. Roeder said that the program now involves many pharmacies, various methods of dispensing medicines, and a large industry of middlemen whose business depends on processing more 340B activity.
According to Roeder, “The biggest flaw is this: In the current setup, the decision about whether a prescription qualifies for the 340B price is often made after the medicine is already given to the patient. This is important because the lower 340B price is supposed to be limited to specific situations.” Roeder explained that when eligibility decisions are made after dispensing medication, it becomes difficult for drug companies to verify if prescriptions qualify before financial transactions occur. He said this system relies on trust rather than upfront verification and can lead to double discounts—where both a 340B discount and another government or insurance discount are applied to one prescription.
The article discusses why common solutions such as billing tags or audits do not consistently prevent these issues before discounts are applied. Roeder proposes a rebate model as an alternative: “A rebate model simply changes the order of operations. Instead of giving the discounted price first and checking later, you check first and then pay the discount only when it is proven to be eligible.” He added that this approach would tie discounts directly to verified eligibility rather than assumptions.
In New Jersey, 340B hospitals are tied to 547 contract-pharmacy arrangements, with 55% located out of state. Opponents of the current model argue that when discounted drugs flow through broad, multi-state pharmacy networks, it can be harder to show patients are receiving savings. The profile also reports 16% of NJ 340B hospitals provide below-average charity care.
Fred Roeder is Managing Director of the Consumer Choice Center and a German health economist. A longtime consumer advocate, he has over a decade of grassroots activism and has worked on healthcare reform across North America and Europe. He focuses on how innovation and disruptive industries expand consumer choice.
