The ADAP Advocacy organization is calling for a significant shift in oversight of the 340B Drug Pricing Program, urging the Centers for Medicare and Medicaid Services (CMS) to take over from the Health Resources and Services Administration (HRSA). In a policy paper released July 27, 2026, titled “340B Program: The Glue That Should Hold Our Healthcare System Together”, the group argues that HRSA has failed over 34 years to ensure that the program’s revenues are used to help low-income and underserved patients as intended.
The 340B Program, created in 1992, requires pharmaceutical companies to sell outpatient drugs at discounted prices to covered entities like disproportionate share hospitals and Ryan White HIV/AIDS Program providers. These entities then receive rebates and are supposed to reinvest those savings into expanding access for vulnerable populations. However, according to ADAP Advocacy, the program has grown to over $100 billion in annual sales—with hospitals accounting for 79% of purchases—without adequate transparency or enforcement of reinvestment requirements.
Brandon M. Macsata, CEO of ADAP Advocacy, stated, “For too long, the 340B Program has been allowed to grow unchecked without any transparency or meaningful regulation or enforcement of the statutory requirements. Unfortunately, HRSA has demonstrated over 34 years that they are simply unable to adequately ensure that covered entities are using the significant revenues they enjoy from 340B sales in ways that comport with either the spirit or the letter of the law.”
The call for CMS oversight is driven by concerns that covered entities are not required to disclose how they spend 340B revenues, except for a few types like Ryan White providers. ADAP Advocacy’s research, which examined 98 hospitals that reported charity care expenditures on federal Form 990s, found that only 27 hospitals increased charity care as a percentage of annual revenues after joining the 340B Program, while 41 hospitals saw decreases of 50% or more. This suggests that many entities are not using the billions in discounts to provide free care to patients in need.
Marcus J. Hopkins, ADAP Advocacy’s Lead Health Policy Consultant, added, “At a time when both access to and the quality of healthcare services for rural and poor Americans are being sacrificed for being too costly and not generating enough revenue, the very least that covered entities can and should be required to do is disclose how the 340B revenues they receive are being spent. There is a fundamental disconnect between the intent of the 340B statute—to reinvest those funds into expanding access and affordability to patients in need—and the belief by many covered entities that they are entitled to use those revenues however they see fit with zero oversight.”
ADAP Advocacy contends that CMS has the regulatory and enforcement expertise to address these issues, even against well-funded lobbying efforts. Macsata noted, “When hospital CEOs literally tell members of Congress that they ‘will not comply’ with any transparency standards they might implement, it’s time for substantive change.” The organization hopes that moving oversight to CMS will ensure the program fulfills its original mission of helping low-income and underserved patients access critical medications.
