Dr. Semaj Y. Vanzant Sr., founder and pastor of Encounter Christ Global Fellowship, said reforms are needed to ensure 340B savings reach low-income patients and help reduce racial health disparities.
“It’s appalling that a government program intended to reduce healthcare inequality is failing to do so — and even making the problem worse. It’s time for reform,” said Y. Vanzant. “Participating hospitals and clinics don’t have to share information about how they use their 340B savings. Nor are they explicitly required to pass the savings on to patients. Free of supervision, hospitals simply spend the money on other priorities. In New Jersey, our state’s 340B hospitals make 1.4 times more in profits from the program than they spend on charity care. The Cooper University Hospital in Camden, which participates in the 340B program, spends just about 2% of its operating costs on charity care. The low-income patients who were supposed to benefit are losing out.”
The 340B Drug Pricing Program, established by Congress in 1992, mandates Medicaid-participating manufacturers to offer outpatient drugs at discounted prices to eligible “covered entities.” The Health Resources and Services Administration (HRSA) oversees the program to aid providers in stretching limited resources. However, recent reviews by the Government Accountability Office (GAO) highlight ongoing vulnerabilities such as duplicate discounts and issues with contract pharmacies, recommending enhanced oversight.
According to a 2024 analysis by the Alliance for Integrity and Reform of 340B (AIR340B), disproportionate-share hospitals earned $44 billion from the program in 2022 while spending approximately $18 billion on charity care during the latest fiscal year—about 42% of their profits from 340B. This report emphasizes the need for stronger oversight to ensure that discounts directly benefit patients rather than increasing institutional margins.
NJ Spotlight News reports that at least 26 New Jersey hospitals participate in the 340B program. Data indicates these hospitals earn 1.4 times more in profits from the program than they spend on charity care. Additionally, it notes that 16% of New Jersey’s participating hospitals provide less charity care than the national average, raising concerns about whether program savings are reaching intended vulnerable patients.
Peer-reviewed research has not identified clear improvements in care quality associated with participation in the 340B program. A study published in JAMA Health Forum by researchers affiliated with NYU Grossman School of Medicine examined hospital quality for Medicaid and uninsured patients but did not find improvements at the eligibility threshold for 340B, suggesting financial gains do not consistently translate into better inpatient outcomes.
Encounter Christ Global Fellowship identifies Rev. Dr. Semaj Y. Vanzant Sr. as its pastor and founder of the Neptune, NJ-based congregation. The church describes its October 29, 2022 launch as part of Vanzant’s vision to “transform lives” and “empower communities,” aligning his ministry with advocacy for equitable access to healthcare.
