CBO Report Reveals Massive Abuse of 340B Program by Hospitals and PBMs

As Congress prepares for the final legislative push of 2025, a new report from the Congressional Budget Office (CBO) reinforces the need to put real PBM reform on the front burner. 

The CBO report exposes how hospital systems and PBMs are exploiting the once-patient-focused 340B drug pricing program – ballooning it into a $44 billion industry and driving up healthcare costs for taxpayers and patients alike. 

The 340B program, initially designed to help patients in need, has exploded in size in recent years. Drug spending within the program jumped from $6.6 billion in 2010 to nearly $44 billion in 2021 – an increase of 567%, which far outpaces the increase in overall U.S. drug spending. 

PBMs play a central role in this expansion, controlling nearly 70% of contract pharmacies in the program. Since 2010, contract pharmacy arrangements have increased over 5,000%, allowing PBMs to siphon a portion of program profits to their affiliated pharmacies while dictating hospitals’ – and thus patients’ – access to discounted drugs. Thus, the program has shifted away from its original patient-centered mission and become a profit driver for middlemen. 

The CBO report makes it clear that Congress must enforce transparency and accountability in the 340B program; otherwise, these unchecked PBMs will keep driving up costs and limiting access to care.  Reform isn’t just smart policy, it’s necessary. Congress must act now to protect patients in need, taxpayers and the integrity of the 340B program.  

Learn more about the PBM issue and legislative solutions here.