July 25, 2025

U.S. Senate
Washington, D.C. 20510

Dear Senator,

On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you to oppose S. 2372, the 340B Patients Act, which was introduced on July 22, 2025, by Sen. Peter Welch (D-Vt.).

The 340B Drug Pricing Program was created in 1992 and requires biopharmaceutical drug manufacturers participating in Medicaid to sell drugs at a 20 to 50 percent discount to “covered entities,” including non-profit hospitals and federally funded health clinics.  The legislation that created the 340B Drug Pricing Program did not define a patient or require the savings to be passed on to patients.  The failure to include a clear definition of a patient has led to a broad interpretation of eligibility which has led to massive growth in the program and has allowed the program to be used to inflate the profits of hospitals and pharmacies.  According to the Health Resources & Services Administration, in 2005, 340B covered entities purchased $2.4 billion in drugs, and in 2023 purchases had increased by 2,500 percent to $66.3 billion, making it the second largest federal prescription drug program after Medicare.

S. 2372 would do nothing to deliver the much-needed reforms to the 340B Drug Pricing Program and would raise costs for nearly everyone.  According to an IQVIA study, legislation to codify contract pharmacies would cost $1.8 billion in additional healthcare spending for private employers due to foregone rebates on medicines purchased at the 340B price.  Legislation like S. 2372 would also cost $272 million in additional healthcare spending for state and local government health plans and $437 million in additional spending for state Medicaid plans and would cost the federal government $763 million per year from foregone Medicaid rebates.

The 340B Drug Discount Program needs reform.  The 340B Patients Act would do nothing to reform the program and would allow the program to continue its exponential growth.  For these reasons, I urge you to oppose S. 2372.  All votes related the 340B Patients Act may be among those considered for CCAGW’s 2025 Congressional Ratings.

Sincerely,
Tom Schatz
President, CCAGW