By Ifeoma C. Udoh, PhD
Growing up in Southern California during the AIDS epidemic, there were community organizations and safety-net programs that were critical lifelines for patients in dire need of care and support. These types of safety-net solutions play a crucial role in today’s healthcare ecosystem and are relied upon by the most vulnerable in our population. Sadly, one of those supports, the federal 340B Drug Pricing Program, has been turned into a profit maximizing tool for the largest hospital chains in the country. Washington state legislators have an opportunity to help shape the program and protect citizens from corporate greed.
The 340B program was created to enable eligible clinics and nonprofit hospitals to purchase outpatient prescription medications at significant discounts, with the intent of passing those savings along to patients. The idea was simple: use those savings to expand services, lower costs for patients, and support care for low-income, uninsured, and underinsured communities. When used as intended, 340B should help vulnerable patients access free or discounted medications. However, due to a lack of transparency and accountability, hospitals and clinics are pocketing the savings from the 340B program, turning it into a growing revenue stream that offers little real benefit to the patients and communities it was meant to help.
Washington is not immune to these consequences. Independent fiscal analysis by Berkeley Research Group estimates that Apple Health forfeits roughly $82 million each year in state funds when providers bill medicines through 340B instead of the traditional Medicaid rebate system. When state health budgets are under increasing pressure and legislators are looking to ease the affordability crisis for Washingtonians, this issue deserves attention in Olympia.
Prescription medicines are increasingly central to outpatient care, particularly for chronic conditions like cancer, autoimmune disease, HIV, and behavioral health disorders. Patients who rely on Medicaid, live in rural areas, or carry high-deductible insurance often face difficult choices between filling a prescription and paying for necessities. A well-functioning 340B program can help relieve that pressure.
The issue is not the existence of the 340B program itself. The program has not been implemented and monitored in a way that maintains it’s original intent as a safety net and resources for underserved communities accessing care. Federal data shows that 340B covered entities purchased more than $81 billion in outpatient drugs in 2024, and almost 80% of that went through hospitals. As more hospitals and contract pharmacies have been covered under 340B, oversight has been virtually nonexistent and patients rarely, if ever, know if 340B savings are actually helping them.
Even when patients receive care at a 340B hospital or clinic, there is no guarantee they will benefit from discounted pricing at the pharmacy counter. Contract pharmacies, which many 340B entities rely on instead of in-house pharmacies, are often located far from the communities that initially justified eligibility. Peer-reviewed research has found that these pharmacies are more likely to be located in higher-income areas, limiting their usefulness for patients facing transportation, mobility, or financial barriers.
In Washington State, Senate Bill 5981, legislation aimed at protecting 340B participation, risks reinforcing these problems instead of fixing them. While I appreciate recent amendments to the bill, they are not enough to ensure the benefits of 340B are being delivered to the patient populations who need it the most.
As a research scientist who has spent decades advocating for policy changes based on data, I am calling on Washington legislators to now do the same. Expanding or codifying 340B practices without understanding their impact only makes it harder to correct course later. Washington should not lock in policies that assume patient benefit without evidence.
Pausing SB 5981 does not mean rejecting the intent of 340B. It shows a commitment to making sure the program works for patients, not just for hospital’s bottom lines. With transparency, accountability, and patient-focused measures, 340B can remain a valuable part of Washington’s health care safety net. Without these, expanding the program could hurt the very access it was meant to protect.
Ifeoma C. Udoh, PhD, is Executive Vice President for Policy, Advocacy, and Science at the Black Women’s Health Imperative.
