Anthony DiGiorgio, DO, MHA, an assistant professor at the University of California, San Francisco, has expressed concerns about the 340B Drug Pricing Program. He said on X that the program incentivizes hospitals to open clinics in affluent areas rather than expanding care for low-income patients.
“The 340B program is a drug discount program meant to help hospitals which service low-income patients,” said DiGiorgio, DO, MHA. “The problem is that the program is designed to do exactly the opposite. All those affiliated clinics are being opened in wealthy, well-insured areas because that’s where you make money reselling discount medications. The 340B program should be reformed so the funds follow the patient and not accrue to large hospital systems which preferentially expand in wealthy areas.”
The U.S. Government Accountability Office reports that the 340B Drug Pricing Program was established in 1992 to enable eligible healthcare organizations to purchase outpatient drugs at discounted prices. The original intent was to assist providers in serving low-income and uninsured patients. However, a 2021 report from the Government Accountability Office found no requirement for hospitals to pass on savings directly to patients. Critics argue that the program has expanded beyond its original scope, disproportionately benefiting large hospital systems.
According to a 2024 IQVIA report, the 340B Drug Pricing Program grew to $124 billion in 2023, doubling in size over the past five years. The report indicates that 70% of 340B purchases in 2023 occurred in hospital outpatient settings, with growth primarily concentrated in large health systems. IQVIA notes this expansion raises questions about whether program growth aligns with its original goal of supporting care for vulnerable populations.
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, potentially affecting the program’s intended impact. Furthermore, it is reported that 16% of participating hospitals in New Jersey provide charity care at levels below the national average.
DiGiorgio is a neurosurgeon and health policy advocate based in California. He serves as an assistant professor at the University of California, San Francisco and as an attending neurosurgeon at Zuckerberg San Francisco General Hospital. His work focuses on clinical care and public policy intersections, with published commentary on healthcare economics, pricing transparency, and reform of federal programs.
