The Wall Street Journal Editorial Board, citing rapid growth and limited oversight, alleged that hospitals are misusing the 340B Drug Pricing Program, raising concerns for New Jersey patients and hospitals that participate in the program. The statement was made in a Wall Street Journal staff editorial.
The 340B Drug Pricing Program was established by Congress in 1992 and is administered by the Health Resources and Services Administration (HRSA). It allows eligible hospitals and clinics to purchase outpatient drugs at steep discounts to stretch limited federal resources. The program’s intent is to expand access to care for low-income and uninsured patients by lowering medication costs.
A 2024 study in the National Library of Medicine found that 340B contract pharmacy arrangements grew from about 1,300 in 2010 to over 60,000 by 2022. Researchers noted limited evidence that the financial benefits from these arrangements directly reduce patient drug costs. The study concluded that transparency is needed to ensure program savings support underserved patients.
An analysis by former Congressional Budget Office Director Dan Crippen estimated that the 340B program reduces federal and state tax revenues by up to $17 billion annually. Of that amount, $3.5 billion is lost at the state and local level. The same report estimated that the value of 340B drug discounts reached about $70 billion in 2023.
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.
The Wall Street Journal Editorial Board consists of senior journalists who write unsigned opinion pieces reflecting the paper’s institutional views. Paul Gigot has led the board since 2001 as Editorial Page Editor. The board regularly addresses topics of national policy, economics, and governance, and plays a role in shaping the public positions of the publication.
