{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,6,24]],"date-time":"2026-06-24T11:52:27Z","timestamp":1782301947134,"version":"3.54.5"},"reference-count":29,"publisher":"SAGE Publications","license":[{"start":{"date-parts":[[2025,9,1]],"date-time":"2025-09-01T00:00:00Z","timestamp":1756684800000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"},{"start":{"date-parts":[[2025,9,1]],"date-time":"2025-09-01T00:00:00Z","timestamp":1756684800000},"content-version":"tdm","delay-in-days":0,"URL":"https:\/\/journals.sagepub.com\/page\/policies\/text-and-data-mining-license"}],"funder":[{"DOI":"10.13039\/100013861","name":"Charles Koch Foundation","doi-asserted-by":"publisher","id":[{"id":"10.13039\/100013861","id-type":"DOI","asserted-by":"publisher"}]},{"name":"Florida Essential Healthcare Partnerships"},{"DOI":"10.13039\/100018748","name":"Argenx","doi-asserted-by":"publisher","id":[{"id":"10.13039\/100018748","id-type":"DOI","asserted-by":"publisher"}]}],"content-domain":{"domain":["journals.sagepub.com"],"crossmark-restriction":true},"short-container-title":["INQUIRY"],"published-print":{"date-parts":[[2025,9]]},"abstract":"<jats:p>The 340B Drug Pricing Program, established in 1992, was designed to help safety-net healthcare providers stretch scarce resources by allowing them to purchase outpatient medications at significant discounts. However, the program\u2019s dramatic expansion, particularly following the Affordable Care Act, and the rise of contract pharmacy arrangements have led to increasing scrutiny regarding its current function and impact. This study examines the flow of funds within the modern 340B ecosystem, with a particular focus on contract pharmacies, pharmacy benefit managers (PBMs), third-party administrators (TPAs), and vertically integrated health systems. Using a detailed mapping of financial transactions, the analysis identifies key areas where profit incentives diverge from the program\u2019s original intent. Covered entities (CEs) often generate substantial profits by purchasing drugs at 340B-discounted rates and receiving standard reimbursements from public and private payers, including Medicare and commercial insurers. These profits are not required to be reinvested in care for underserved populations. Additionally, the use of contract pharmacies and TPAs has introduced significant complexity, increasing the risks of drug diversion and duplicate discounts, particularly with Medicaid and Medicare rebate programs. Vertically integrated PBM pharmacy chains dominate the landscape, often capturing outsized revenue. Legal and regulatory ambiguities further complicate oversight and enforcement. This paper provides an overview of the current 340B funds flow through contract pharmacies, highlighting areas of misalignment with the program\u2019s mission. In doing so, it informs ongoing legislative and administrative reform efforts, emphasizing the need to re-center the program around its intended beneficiaries, low-income and vulnerable patients.<\/jats:p>","DOI":"10.1177\/00469580251404363","type":"journal-article","created":{"date-parts":[[2025,12,24]],"date-time":"2025-12-24T06:44:26Z","timestamp":1766558666000},"update-policy":"https:\/\/doi.org\/10.1177\/sage-journals-update-policy","source":"Crossref","is-referenced-by-count":1,"title":["Mapping 340B Funds Flow Through Contract Pharmacies"],"prefix":"10.1177","volume":"62","author":[{"given":"Anthony M.","family":"DiGiorgio","sequence":"first","affiliation":[{"name":"The University of California, San Francisco, CA, USA"},{"name":"Zuckerberg San Francisco General Hospital and Trauma Center, San Francisco, CA, USA"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"ORCID":"https:\/\/orcid.org\/0009-0001-4261-0654","authenticated-orcid":false,"given":"Parisa","family":"Jahangirizadeh","sequence":"additional","affiliation":[{"name":"The University of California, Berkeley, CA, USA"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"ORCID":"https:\/\/orcid.org\/0009-0004-5805-5423","authenticated-orcid":false,"given":"Deborah","family":"Williams","sequence":"additional","affiliation":[{"name":"Health Policy Insights, LLC"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"179","published-online":{"date-parts":[[2025,12,23]]},"reference":[{"key":"e_1_3_3_2_2","unstructured":"HRSA. 340B drug pricing program. Published online October 2025. Accessed November 4 2025. https:\/\/www.hrsa.gov\/opa#:~:text=The%20340B%20Program%20enables%20covered and%20providing%20more%20comprehensive%20services"},{"key":"e_1_3_3_3_2","unstructured":"U.S. Government Accountability Office. Medicare Part B Drugs: Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals. U.S. Government Accountability Office; 2015:39. Accessed November 4 2025. https:\/\/www.gao.gov\/products\/gao-15-442#:~:text=GAO%20found%20that%20in%20both Medicare%20beneficiaries%20as%20well%2C%20who"},{"key":"e_1_3_3_4_2","doi-asserted-by":"publisher","DOI":"10.1111\/1475-6773.13281"},{"key":"e_1_3_3_5_2","doi-asserted-by":"publisher","DOI":"10.1016\/j.jhealeco.2025.102971"},{"key":"e_1_3_3_6_2","doi-asserted-by":"publisher","DOI":"10.1001\/jamahealthforum.2023.1026"},{"key":"e_1_3_3_7_2","doi-asserted-by":"publisher","unstructured":"Deacon C Gelfand J Goldberger P Gremminger S. New medicaid rule adds fuel to the fire of commercial hospital price inflation. Published online August 9 2024. doi:10.1377\/forefront.20240808.855677","DOI":"10.1377\/forefront.20240808.855677"},{"key":"e_1_3_3_8_2","doi-asserted-by":"publisher","DOI":"10.1001\/jamahealthforum.2023.3716"},{"key":"e_1_3_3_9_2","unstructured":"Magnolia Market Access. How 340B disproportionate share hospitals (DSH) are failing to reinvest in patient care. 2025. Accessed November 4 2025. https:\/\/www.magnoliamarketaccess.com\/insight\/the-340b-prescription-drug-coverage-program-how-covered-entities-are-failing-to-reinvest-in-patient-care\/"},{"key":"e_1_3_3_10_2","unstructured":"Hamme Joel von OehsenIII et al. Brief of a Coalition of 340B Entity Groups as Amicus Curiae in Support of Respondent. Supreme Court of the United States; 2010. Accessed November 4 2025. https:\/\/www.nationalfamilyplanning.org\/document.doc?id=388"},{"key":"e_1_3_3_11_2","doi-asserted-by":"publisher","DOI":"10.37765\/ajmc.2021.88761"},{"key":"e_1_3_3_12_2","doi-asserted-by":"publisher","DOI":"10.1001\/jamahealthforum.2024.3360"},{"key":"e_1_3_3_13_2","unstructured":"U.S. Department of Health and Human Services Health Resources and Services Administration. Notice Regarding 340B Drug Pricing Program-Contract Pharmacy Services; 2010:10272-10279. Accessed November 4 2025. https:\/\/www.federalregister.gov\/documents\/2010\/03\/05\/2010-4755\/notice-regarding-340b-drug-pricing-program-contract-pharmacy-services"},{"key":"e_1_3_3_14_2","unstructured":"Cunningham B. 340B Covered Entity Report: Report to the Minnesota Legislature. Minnesota Department of Health Health Economics Program; 2024. Accessed November 4 2025. https:\/\/www.health.state.mn.us\/data\/340b\/docs\/2024report.pdf"},{"key":"e_1_3_3_15_2","doi-asserted-by":"publisher","DOI":"10.1186\/s13104-021-05642-4"},{"key":"e_1_3_3_16_2","doi-asserted-by":"publisher","DOI":"10.1377\/hlthaff.2014.0540"},{"key":"e_1_3_3_17_2","doi-asserted-by":"publisher","DOI":"10.1111\/1475-6773.12823"},{"key":"e_1_3_3_18_2","doi-asserted-by":"publisher","DOI":"10.1093\/haschl\/qxad075"},{"key":"e_1_3_3_19_2","unstructured":"MACPAC. The 340B Drug Pricing Program and Medicaid Drug Rebate Program: How They Interact. Medicaid and CHIP Payment and Access Commission; 2018. Accessed November 4 2025. https:\/\/www.macpac.gov\/wp-content\/uploads\/2018\/05\/340B-Drug-Pricing-Program-and-Medicaid-Drug-Rebate-Program-How-They-Interact.pdf"},{"key":"e_1_3_3_20_2","unstructured":"Rouff A. Push for Change in 340B Drug Pricing Program. 2025. Accessed November 4 2025. https:\/\/www.mmitnetwork.com\/thought-leadership\/push-change-340b-drug-pricing-program\/"},{"key":"e_1_3_3_21_2","unstructured":"340B Health. 340B Drug Pricing Program Overview. Accessed November 4 2025. https:\/\/www.340bhealth.org\/members\/340b-program\/overview\/"},{"key":"e_1_3_3_22_2","unstructured":"Department of Health and Human Services. 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation. Department of Health and Human Services; 2017:1210-1230. Accessed November 4 2025. https:\/\/www.federalregister.gov\/documents\/2017\/01\/05\/2016-31935\/340b-drug-pricing-program-ceiling-price-and-manufacturer-civil-monetary-penalties-regulation"},{"key":"e_1_3_3_23_2","unstructured":"Medicare Payment Advisory Commission. Overview of the 340B Drug Pricing Program. Medicare Payment Advisory Commission; 2015. Accessed November 4 2025. https:\/\/www.kslegresearch.org\/KLRD-web\/Publications\/Resources\/Documents\/340B\/340b-overview.pdf"},{"key":"e_1_3_3_24_2","doi-asserted-by":"publisher","DOI":"10.1001\/jama.2013.4156"},{"key":"e_1_3_3_25_2","doi-asserted-by":"publisher","DOI":"10.1377\/forefront.20240103.924897"},{"key":"e_1_3_3_26_2","unstructured":"National Association of Community Health Centers. State-Level Laws to Protect CHCs\u2019 340B Savings. National Association of Community Health Centers; 2025. Accessed November 4 2025. https:\/\/www.nachc.org\/wp-content\/uploads\/2025\/09\/09_9_25_nachc_state-level-340b-laws-and-legislation_tracker.pdf"},{"key":"e_1_3_3_27_2","unstructured":"Pharmaceutical Research and Manufacturers of America v. U.S. Department of Health & Human Services. (U.S. District Court District of Columbia 2025); 2015. Accessed November4 2025. https:\/\/cases.justia.com\/federal\/district-courts\/district-of-columbia\/dcdce\/1:2014cv01685\/168424\/29\/0.pdf?ts=1444911425"},{"key":"e_1_3_3_28_2","unstructured":"United States Court of Appeals for the Eighth Circuit. Pharmaceutical Research & Manufacturers of America v. McClain (Supreme Court of the United States 2024); 2024. Accessed November 4 2025. https:\/\/www.supremecourt.gov\/DocketPDF\/24\/24118\/331098\/20241104152346835_No.%2024-118%20-%20Brief%20in%20Opposition%20of%20Respondent%20Alan%20McClain.pdfhttps:\/\/www.supremecourt.gov\/DocketPDF\/24\/24-118\/331098\/20241104152346835_No.%2024-118%20-%20Brief%20in%20Opposition%20of%20Respondent%20Alan%20McClain.pdf"},{"key":"e_1_3_3_29_2","unstructured":"PhRMA v. Murrill; AstraZeneca Pharms. LP v. Murrill; AbbVie Inc. et al. v. Murrill. (U.S. District Court Western District of Louisiana (Lafayette Division). 2024. Accessed November 4 2025. https:\/\/www.aha.org\/system\/files\/media\/file\/2024\/09\/abbvie-inc-et-al-astrazeneca-pharmaceuticals-lp-pharmaceutical-research-and-manufacturers-of-america-vs-murrill-340b-court-decision-9-30-2024.pdf"},{"key":"e_1_3_3_30_2","unstructured":"Novartis Pharmaceuticals Corp.. v. Morrisey et Al. (U.S. District Court Southern District of West Virginia 2024); 2024. 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