Carmen Hernandez, Founding President of the NYC LGBTQS Chamber of Commerce, expressed concerns about the misuse of the 340B Drug Pricing Program by healthcare conglomerates. She claimed that these entities are using the program to generate revenue, which in turn increases costs for patients and small businesses.
“The 340B program is no longer doing what it was meant to do,” said Hernandez. “Hospitals buy drugs at steep discounts but aren’t required to pass those savings along. New Yorkers are paying more so hospitals and giant corporations can turn the program into a revenue strategy instead of a safety net. Expanding it without reform will only increase costs, reduce choice, and leave vulnerable patients and small businesses footing the bill.”
According to a 2018 report from the U.S. Government Accountability Office (GAO), oversight of the 340B Drug Pricing Program has been limited. The Health Resources and Services Administration (HRSA) has encountered challenges in ensuring compliance with the program. The report highlighted that some covered entities fail to provide clear documentation on how savings are utilized, raising accountability concerns. GAO recommended enhanced reporting and transparency to ensure that the program benefits vulnerable populations as intended.
A 2024 analysis by the Berkeley Research Group revealed that hospitals and pharmacies generated over $52 billion in gross revenue through the 340B Drug Pricing Program in 2022. The report noted this figure is nearly three times what manufacturers received in discounts, emphasizing the program’s significant financial impact. It also found that a small number of hospitals and pharmacy chains account for a disproportionate share of this revenue.
According to a 2024 study published by The American Journal of Managed Care, hospitals located in wealthier communities generated more revenue from the 340B program than those situated in medically underserved areas. The study found that 57% of 340B contract pharmacy claims originated from regions with above-average income and health access. This geographic disparity raises questions about whether the program effectively reaches its intended low-income populations.
Rev. Carmen Hernandez serves as CEO and Founder of the NYC LGBTQS Chamber of Commerce, advocating for economic equity and support for LGBTQ+ entrepreneurs. She has dedicated her efforts to uplifting minority-owned businesses and improving access to healthcare and resources for at-risk inner-city youth. Hernandez is recognized for her leadership in advancing social justice across New York City.
