Contributed by SME: Valerie Bandy, PharmD, Vice President, Pharmacy Solutions, Tecsys

The 340B Drug Pricing program has been under a microscope lately. Senator Bill Cassidy’s proposals to tighten oversight have once again put the program’s future in question, and pharmaceutical manufacturers have begun withdrawing discounts from hospitals that don’t meet their own requirements. 

This is all happening while hospitals continue to be squeezed by lower reimbursements and Medicaid cuts. But 340B can be a lifeline for some organizations. For instance, in 2024, eligible healthcare organizations purchased $81.4 billion in discounted drugs through 340B, a 23% increase from the prior year. 

Running 340B properly gets harder as more organizations participate, and the policy debate is now drawing plenty of attention. Eligibility, reimbursement, and reform are all real and important dialogues to have. But they tend to skip past the actual hospital and pharmacy operations, where keeping up with 340B can get messy. 

The hardest part about realizing value across the 340B system is what it takes to run it day in and day out. Maintaining compliance, managing real-time inventory, keeping up with clinicians, and making sure patients don’t fall through the cracks all at the same time are where it gets complicated. 

The Rebate Problem

One of the biggest concerns is the growing reliance on rebate-based models. Pharmacy departments have always had a complicated relationship with rebates, even before 340B came into the picture. Every rebate introduces another layer of administrative work, requiring teams to track individual drugs, manufacturers, and purchasing records while maintaining complete documentation. That work doesn’t replace existing responsibilities. It lands on top of everything else pharmacy teams are already managing.

Rebates also don’t frequently return to the pharmacy cost center responsible for purchasing the medication. In some organizations, they are recorded elsewhere within the health system, making pharmacy drug spend appear artificially high. Even when rebates eventually reach the right cost center, those funds may not arrive for months. During that time, pharmacy leaders are expected to explain elevated drug spending while awaiting financial relief that hasn’t materialized.

Who Carries the Weight

For covered entities, particularly critical access hospitals and safety-net providers, those financial delays hit the hardest. These organizations must purchase medications upfront and bear the cost while waiting for rebates that may take months to materialize. There’s less room for them to maneuver when cash flow is anything but predictable and purchasing decisions are constrained. Larger health systems may have the resources to absorb those pressures, but even then, every dollar tied up in administrative delays isn’t going toward patient care or staffing.

What’s more, inventory management becomes more complicated as organizations work to separate purchasing streams, monitor compliance requirements, and maintain complete audit trails. Processes that were once relatively straightforward require additional oversight, documentation, and reconciliation.

The question that too often goes unanswered is who’s actually absorbing all of this work. Pharmacists and pharmacy technicians pour hours into reconciling rebates, compiling audit documentation, and monitoring compliance. It’s all necessary work, but it’s not where these professionals make their biggest difference. The time they spend chasing down spreadsheets and manually counting inventory is time not dedicated to patient care. 

Collaborative, Not Reactive

Recent actions by manufacturers make the case for collaboration. When pharmaceutical companies make unilateral decisions affecting 340B participation, the impact extends well beyond pricing negotiations. Those decisions ripple through hospitals, pharmacies, and the patients who depend on them. Hospitals, too, cannot dismiss the legitimate compliance concerns manufacturers have raised.

340B is genuinely complex. The compliance and operational demands it places on pharmaceutical companies, health system covered entities, and their child sites are real, and the relationships among all of those parties are intricate. That complexity is exactly why cracks appear in the program. When they do, the right response is a collaborative one among health systems, pharmaceutical companies, and the partners involved in maintaining and operating 340B compliance.

There cannot be knee-jerk reactions that send ripple effects through partner organizations, or consequential decisions made without accounting for their downstream implications. The pressures companies are navigating from their own stakeholders are understandable. But the answer isn’t to act unilaterally. There’s a workable middle ground, and getting there requires pharma to come to the table with health systems rather than hand down decisions from a distance.

Build the Structure Now

As 340B continues to expand, organizations need stronger internal governance and technology. Too often, responsibility for the program is distributed across multiple departments with no single leader accountable for its overall performance. Purchasing, compliance, finance, and pharmacy may each oversee part of the process, but fragmented ownership makes it harder to identify trends, prepare for audits, or demonstrate program value.

A centralized 340B service center or a dedicated system-level program manager can consolidate those responsibilities. Oversight of audits, reporting, purchasing trends, compliance activities, and program performance improves when one person or team holds the full picture, rather than managing a collection of disconnected processes.

The emergence of AI, particularly around agents and automated workflows, is beginning to address what manual oversight cannot. Rather than surfacing compliance problems after the fact, these tools monitor purchasing behavior continuously across covered entities and child sites, identify GPO-prohibited transactions before a breach occurs, and alert purchasing teams in time to correct course. That kind of persistent, pattern-intensive monitoring shouldn’t fall on pharmacy staff, who are already being asked to do too much. Shifting it to an automated layer, where pharmacists and other clinicians remain in control, returns time to the people best positioned to use it at the patient level and at the bedside.

The 340B program will continue growing in both participation and financial significance, and with that growth will come greater scrutiny from regulators, manufacturers, and healthcare organizations. Preparing means looking beyond eligibility requirements and policy debates. It means building operational models that can support a larger, more closely examined program while staying true to its core mission.

340B will get more complex before it gets simpler. The question for pharmacy leaders is whether their organizations are building the operational foundation to manage that complexity before the next policy shift or manufacturer announcement forces a reactive scramble.

References

DeFeudis, N. (2025). 340B sales grew 23% last year, and court battle over pilot program intensifies. Endpoints News.

Parduhn, R. P. (2026). Hospitals irate after Eli Lilly follows through on 340B ultimatum. Healthcare Dive.

Wilkerson, J. (2026). Cassidy proposes bill to rein in 340B drug discount program. STAT.