Pharmacy leaders in ASHP survey worry about 340B program changes

The uncertainty around the impact of healthcare policy changes is putting pressure on hospitals and health systems, and many pharmacy leaders are thinking about making changes to address a predicted rise in uncompensated care, according to a recent survey by ASHP.

Several major trends are emerging that could lead to hospitals having to fund uncompensated care, Tom Kraus, VP of government relations for ASHP, said in an interview with Managed Healthcare Executive.

“As ACA and Medicaid coverage are reduced, hospitals will see more of those uncompensated care patients. That’s going to put more pressure on 340B to cross-subsidize those patients, but 340B is under pressure,” he said. “Hospitals need greater flexibility to cross-subsidize care for that uncompensated population.”

Congress has yet to act on how to address the affordability gap after enhanced subsidies for Affordable Care Act (ACA) health plans expire at the end of the year. The enhanced subsidies were enacted during the COVID-19 pandemic and extended through the end of 2025 by the Inflation Reduction Act. The loss of the enhanced subsidiaries is expected to increase costs for enrollees at a time when health insurance rates as a whole are going up. This is because of rising healthcare costs, inflation, labor and provider costs and tariffs, according to a Peterson KFF Health System Tracker.

This rise in costs could leave many people without coverage, with 1 in 4 saying they will very likely go without coverage, according to KFF.

Both parties have introduced healthcare proposals, with Democrats wanting to extend subsidies and Republicans proposing consumer health savings accounts as a way to help pay for healthcare costs. But after several votes, no consensus has been reached.

340B impact

The 340B drug pricing program allows qualifying hospitals to purchase medications at discounted rates and use the savings to fund patient care services. Since its implementation in 1992, the 340B program has grown to two-thirds of all nonprofit hospitals in the United States.

Covered entities purchased $81.4 in covered outpatient drugs under the program in 2024, according to the Health Resources & Services Administration (HRSA), which oversees the program. Specialty drugs accounted for 54% of this spending, driven by growth in immunology and oncology. The top 10 drugs purchased in 2024 represented approximately one-third of the total spending in the 340B program.

Hospitals use the savings to cover the costs of providing to low-income patients in the outpatient setting. 340B hospitals provided nearly $100 billion in community benefits in 2022, which included the provision of free or reduced-cost care and medications, as well as free clinics, health screenings and community education on chronic disease, according to American Hospital Association.

Addressing potential changes to the 340B program, specifically the introduction of a rebate model, is the most pressing concern among health systems, Kraus said. In ASHP’s survey, 60% of the 298 respondents said that pharmaceutical manufacturers requiring a rebate model was somewhat or very likely, which they believed would erode health system margins and revenue.

Beginning in January 2026, HRSA will begin a pilot 340B rebate program for those drugs on the first set of the CMS Medicare drug price negotiation, with the new prices going into effect in January 2026. The voluntary rebate program was announced in a Federal Register notice on Aug. 1, 2025; instead of receiving the discounted price upfront, health systems will submit a request for a rebate. Hospitals continue to purchase these 10 drugs through their 340B wholesaler account and request rebates after a purchase through the Beacon Platform, a technology platform operated by Second Sight for the rebate pilot program.

Related: What IRA drug prices will mean for PBMs, health plans and patients

“Rather than providing the discount upfront off the wholesale acquisition cost, hospitals will have to chase down a rebate from the manufacturer. That means that for a hospital, they need to outlay more cash upfront,” Kraus said. “We’re concerned that at least in some instances, the manufacturer is going to say that hospitals might not be eligible for the rebate, and they’re going to dispute it.

But it’s unlikely that hospitals will have to wait long to be reimbursed, Shawn Gremminger, National Alliance president and CEO and an editorial board member of Managed Healthcare Executive, said in an interview. “They’re not floating the cost of the drug for months. It’s for a couple of weeks, and most hospitals have plenty of cash on hand to be able to engage in that process; on average, hospitals have 180 days of cash on hand. And we’re not talking about a lot of drugs because [in the pilot] these are just the drugs under the IRA.”

Kraus pointed to hospitals closing as evidence of thin operating margins for some hospitals. “Rebates are common between private parties, but this is a public program that is intended to subsidize safety net hospitals. Congress intended the program to subsidize care, and you’re shifting the dollars to high-margin manufacturers,” he said.

A paper published in November 2025 in Health Affairs argues that the financial impact of a rebate program will have different impacts on different providers. Federal grantees (such as community health centers) and public hospitals may experience administrative and financial challenges in a rebate model for 340B products. Author Sayeh Nikpay, Ph.D., associate professor, division of health policy and management at the University of Minnesota, said HRSA monitoring will be key.

Community health centers serve about 52 million Americans, including 20 million in poverty, according to the National Association of Community Health Centers (NACHC), which is calling for an exemption from the 340B rebate model for community health centers.

Gremminger, however, pointed out that many community health centers vary in size, with many being quite large. “I could see a world in which the very, very smallest rural hospitals and community health centers might have a cash challenge,” he said.

Additionally, the costs to implement a rebate program may be small, according to an analysis by IQVIA, which assessed the financial costs to hospitals of the rebate program. They found that costs are less than 1% of the wholesale acquisition cost, or about the same as those of existing drug inventory models.

More than half of those who responded to the ASHP survey indicated health systems will adjust and implement strategies to adapt to the changes.