October 20, 2025

The Honorable James Uthmeier

Office of the Attorney General
State of Florida
Florida State Capitol
400 South Monroe Street
Tallahassee, Florida 32399

Dear Attorney General Uthmeier,

On behalf of the undersigned organizations, we urge you to conduct a review of the cost of Florida’s participation in the federal 340B Drug Pricing Program, given its significant impact on patients, taxpayers, and employers.  We would welcome the opportunity to discuss this issue with you in more detail.

The 340B program was created by Congress in 1992 to help federally funded clinics and public hospitals that serve a large uninsured population cover the cost of drugs and provide discounts to patients.  The 340B covered entities include federally funded health clinics and non-profit disproportionate share hospitals (DSH) which receive supplemental federal funds in proportion to the number of low-income Medicare and Medicaid patients and uninsured indigent patients they serve.

However, the lack of a clear definition of eligible patients, along with poor oversight, has led to the program being exploited by hospitals and contract pharmacies to generate millions of dollars in profit.  The abuses of the program have been highlighted in myriad investigations and reports.  A May 30, 2025, Ohio Capital Journal article revealed how hospitals like the Cleveland Clinic, which received $933.7 million in 340B drug discounts between April 2020 and June 2023, have funneled these funds into general operating budgets and executive pay.  A September 24, 2022, New York Times article about Richmond Community Hospital in Virginia, owned by Bon Secours, found that instead of reinvesting profits from 340B drug sales into its DSH facility and improving patient care, the money was invested in facilities in the city’s wealthier neighborhoods.

There have also been efforts by state leaders to provide more transparency.  A May 2024 North Carolina State Treasurer investigative report revealed that 340B hospitals charged cancer patients an average of 5.4 times the discounted acquisition cost, giving hospitals profits of up to $6,026 for each claim.  One of the researchers who analyzed the costs of 340B for the report said that 340B hospitals paid about $8,000 for a cancer drug to treat melanoma and charged the North Carolina State Health Plan nearly $22,000, and that the hospitals get an 85 percent higher price markup compared to non-340B hospitals.

A November 25, 2024, Minnesota Department of Health report found that the largest hospitals, or 13 percent of the total, received 80 percent of the revenue, leaving smaller hospitals to struggle.  A January 23, 2025, fiscal analysis of 340B contract pharmacy mandate legislation in Utah found that a 10 percent increase in 340B drug purchases could increase annual costs by $1,987,700 for the Public Employees Health Program.  Floridians deserve the same level of transparency provided by the North Carolina, Minnesota, and Utah reports.

The impact of 340B on states has also been analyzed by IQVIA.  Their 2025 study revealed the 340B program costs Florida taxpayers $43 million annually and employers and workers $246 million annually.

Since 340B was created by federal statute, it is up to Congress to enact structural reforms to the program to ensure that 340B discounts reach the patients the program is intended to serve.  An April 24, 2025, Senate Health, Education, Labor and Pension Committee Majority Staff report on 340B makes the case for reforms like those suggested by Citizens Against Government Waste and the James Madison Institute, including a clear definition of a patient as an uninsured, low-income individual who does not qualify for Medicare or Medicaid, providing better verification of patient eligibility when a prescription is filled, verifying that services were provided within the past 12 months, eliminating duplicate discounting with improved oversight, revising reporting requirements, and increasing transparency to make it clear how hospitals are using 340B funds.

We urge you to investigate how 340B affects patients and taxpayers in the Sunshine State and what could be done to increase accountability and transparency.  Your investigation can provide Florida legislators and Governor DeSantis with a plan of action on 340B that would help increase transparency, prevent abuse, and provide the drug discount benefits to the indigent patients that Congress intended the program to help.

Thank you for your attention to this important issue.  We look forward to working with you to protect Florida taxpayers and help patients.

Sincerely,

Tom Schatz                                                                  Doug Wheeler
President                                                                      Director
Citizens Against Government Waste                 Gibbs Center         
                                                                                          The James Madison Institute