340B drug discount program

A former doctor, using the alias Richard Graydon, evaded detection for two decades while working in the biotech industry. A New Hampshire hospital is suing Eli Lilly over data requirements tied to the 340B drug discount program.

Sales under the U.S. 340B Drug Discount Program reached $100 billion in 2025, a 22.8% increase from the previous year. Expensive medicines accounted for 62% of spending, with Merck’s Keytruda and Gilead Sciences’ Biktarvy being the top two drugs by spending. The program requires drugmakers to offer 25-50% discounts to hospitals and clinics serving lower-income patients.

Medicare proposes reducing payments to hospitals for drugs under the 340B program by over a third, citing surveys showing some patients paid more than hospitals. The change, part of a hospital outpatient payment rule, faces criticism from nonprofit and academic hospital groups, who argue it will harm safety-net providers, as only nonprofit facilities qualify for 340B discounts.

A bill introduced by Sen. Bill Cassidy (R-La.) aims to overhaul the 340B drug discount program by implementing restrictions such as retroactive rebates and sliding-fee scales for hospitals. Jeff Vacirca, a physician and leader of a New York oncology group, is among candidates being considered for FDA commissioner by the Trump administration.

The chair of the Senate health committee introduced a bill to restrict the 340B drug discount program, which has been lucrative for nonprofit hospitals. The bill comes as hospitals face financial pressures from Medicaid changes and potential site-neutral payment legislation, with the 340B program under scrutiny for future healthcare spending cuts.

Eli Lilly has warned approximately 50 hospitals in the 340B drug discount program to submit claims data within five days to retain price breaks. The company aims to reduce duplicate discounts, but some large hospital systems have refused compliance despite follow-up letters. Up to 1,000 hospitals remain non-compliant.

Mount Sinai has filed a lawsuit against CVS, alleging a $121 million racketeering scheme where the pharmacy chain illegally diverted federal prescription drug discounts intended for low-income New York patients. The hospital system claims CVS operated a secret pricing scheme to pocket savings from the federal 340B drug discount program.