Analysis finds commercial prices much higher at large 340B hospitals, adding to other program cost drivers like lost rebates, drug markups, distorted prescribing patterns and consolidation
WASHINGTON – April 1, 2025 – The 340B Drug Pricing Program was originally intended to help cash-strapped safety-net providers offer lower cost medicines and expand care for low income and underserved patients. It has evolved into a “buy low and sell high” mechanism where employers and working families are charged the full commercial price for medications with hospitals pocketing the difference. To gain an understanding as to just how high commercial prices are for high-volume procedures, a new analysis was released by the National Alliance of Healthcare Purchaser Coalitions.
Among the findings:
- Commercial prices were roughly 7% higher at large 340B hospitals vs. large non-340B hospitals
- Prices for outpatient procedures were nearly 20% higher at large 340B vs. large non-340B hospitals
- The 340B price premium translates to approximately $36 billion a year in extra hospital spending by employers
“This study adds to the large and growing body of evidence that 340B is often a shell game that has a substantial impact on commercial healthcare prices,” said Shawn Gremminger, president and CEO, National Alliance of Healthcare Purchaser Coalitions. “While the analysis does not imply causation, it shows an overwhelming correlation between 340B eligibility and higher costs for employers and other healthcare purchasers and working families.”
The analysis reinforces the mounting proof that the $66 billion and growing 340B program is contributing to higher costs for commercial employers and their workers, rather than offsetting the cost of care. The effect is especially pronounced at the largest hospital systems, which reap the majority of the program’s proceeds.
“Hospital prices and healthcare premiums continue to rise across the country with employers and employees bearing the brunt,” added Gremminger. “We encourage advocates and policymakers to join the National Alliance and its member coalitions in promoting greater transparency to better understand the program’s downstream impacts across the healthcare system to inform policy solutions that ensure 340B works more effectively for all of us.”
A link to the report including study methodology, The 340B Premium: New Data Shows Program Inflates Prices for Working Families, can be accessed here.
About National Alliance of Healthcare Purchaser Coalitions
For over 30 years, the National Alliance has united business coalitions and their employer/purchaser members to achieve high-quality care that improves patient experience, health equity, and outcomes at lower costs. Its members represent private and public sector, nonprofit, and labor union organizations that provide health benefits for more than 45 million Americans and spend over $400 billion annually. To learn more, visit nationalalliancehealth.org and connect on LinkedIn.
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