The 340B hospital drug discount program crossed the $100 billion threshold in 2025, a stunning 23% one-year increase. It’s probably the biggest federal program that most people have never heard of.
The original idea of the program was simple. Manufacturers sell outpatient drugs cheaply to safety-net hospitals to serve low-income patients. The big nonprofit hospital systems instead constructed a sprawling scheme to buy drugs at a huge discount, bill taxpayers and insurance plans at full price, and pocket the difference.
Dr. Oz has proposed an obvious fix: pay hospitals based on what the drugs actually cost. The year-one savings: $4.55 billion for Medicare and $1.15 billion in patient out-of-pocket costs. And demand full transparency. When CMS asked hospitals what they actually pay for drugs, less than one-of-three hospitals responded.
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