Dutch Rojas, Founder of ReKlaim Health, said nonprofit academic health systems take advantage of the 340B drug discount program, profiting from a benefit meant to help low-income patients. This statement was made on X.
‘Nonprofit Academic Health Systems pay no taxes. Not federal. Not state. Not local. Not even property tax on entire medical cities’ said Rojas. ‘Instead, they receive public funding: Massive Medicaid subsidies, 340B drug discounts (profit from the poor), Tax-exempt bonds (Wall Street without the risk), Federal research grants (thank you, ACIP!), Academic subsidies just for being a “school”. They pay their CEO more than the Governor, HHS Secretary, and U.S. President combined. This is not a nonprofit. It is a government-sponsored hedge fund with a teaching hospital façade’
Established in 1992 and administered by the Health Resources and Services Administration (HRSA), the 340B Drug Pricing Program was created to help healthcare providers stretch limited resources to serve vulnerable populations. It allows eligible entities to purchase outpatient drugs at reduced prices. These savings are intended to support access to care for low-income and uninsured patients.
A 2024 study published in the National Library of Medicine found that the number of 340B contract pharmacy arrangements increased dramatically from 1,300 in 2010 to over 60,000 by 2022. The study raised concerns about how the financial benefits from these arrangements are distributed, noting a lack of evidence that patients directly benefit from the savings. Researchers stated the need for greater transparency in the program’s financial flows.
PhRMA reports that 25 hospitals in New Jersey participate in the 340B program, holding 547 contracts with pharmacies across the country. Of these contract pharmacies, only 18% are located in medically underserved areas, which may affect the program’s intended impact. Furthermore, 16% of participating hospitals in New Jersey provide charity care at levels below the national average.
Dutch Rojas is the founder of ReKlaim Health, a healthcare entrepreneur with three successful startup exits, and an advocate for physician-owned hospitals and independent medical practice. He writes extensively on U.S. healthcare issues, focusing on improving patient outcomes and exposing inefficiencies within the current system. Rojas is also a well-known patient advocate, using his platform to promote transparency and reform in the healthcare sector, as per his LinkedIn.
