A Patient-Centered Reconstruction of 340B in Oncology: Transparency, Equity, and Site-of-Care Accountability

The American Society of Clinical Oncology (ASCO) deserves credit for revisiting the 340B Drug Pricing Program in its May 2026 policy statement—a timely move as oncology drug spending, site-of-care migration, contract-pharmacy growth, and practice consolidation reshape access to cancer care.¹ The updated statement recognizes that the hospital-centered eligibility framework can exclude independent community oncology practices caring for Medicaid, uninsured, underinsured, and dual-eligible patients. It also emphasizes transparency, accountability, annual claims-based validation, limits on hospital-owned practices, and a requirement that the 340B program benefit the patients it was designed to serve.¹ These acknowledgments are useful, but the ASCO statement should not be treated as the end point for reform. It remains organized around entity eligibility and institutional metrics, not around a bright-line definition of which patients qualify for 340B and which claims do not.

That limitation should not be minimized. A recent legislative history by Nikpay et al strengthens the case for a complete overhaul rather than incremental expansion.² The authors reported that Congress created 340B in 1992 primarily to address an unintended consequence of the Medicaid Drug Rebate Program’s best-price provision on Public Health Service Act–funded clinics and state and local public hospitals; the secondary purpose was to preserve and expand access to free or discounted care by reducing drug prices for core safety-net providers. They also concluded that the current scope of the program exceeds Congress’s original intent.² We support that initial purpose: improving access to outpatient medications and related cancer care for low-income and medically vulnerable patients. In practice, however, a program designed to improve patient-level affordability has increasingly functioned as institutional revenue support, with limited, inconsistent, and often insufficiently documented translation into direct benefit for vulnerable patients. In oncology, where high-cost infused and oral drugs create substantial acquisition discounts, reimbursement spreads, and site-of-care incentives, reform should not merely expand eligibility; it should rebuild 340B so the discount follows a qualifying financially vulnerable patient.

Evidence Review Approach

This commentary used a targeted, Preferred Reporting Items for Systematic Reviews and Meta-Analyses–style narrative review rather than a de novo registered systematic review. We prioritized PubMed/MEDLINE-indexed studies; JAMA Network journals; the New England Journal of Medicine; Health Services Research; Health Affairs; The Milbank Quarterly; JCO Oncology Practice; and high-quality reports from the Congressional Budget Office (CBO), the US Government Accountability Office (GAO), the FDA, ASCO, and the Community Oncology Alliance (COA). We did not use advocacy claims as evidence unless they were traceable to a publication or public report. Search concepts included 340B, oncology, cancer drugs, hospital outpatient department, contract pharmacy, uncompensated care, charity care, practice consolidation, orphan drug, patient definition, community oncology, legislative history, Medicaid Drug Rebate Program, and best price. A JAMA Health Forum scoping review had already searched PubMed, Embase, EconLit, the National Bureau of Economic Research, Westlaw, the US Department of Health and Human Services Office of Inspector General, GAO, and Google, identifying 900 documents and including 289 of them. We used it as the evidence map, emphasizing oncology-relevant comparative studies and policy audits.³ We also reviewed the 2026 Milbank Quarterly legislative history, which used 175 internal primary source documents and 19 structured interviews with 18 key informants to clarify congressional intent.²

Study selection emphasized designs capable of detecting policy effects: regression discontinuity around eligibility thresholds, difference-in-differences analyses of newly participating markets or hospitals, national cross-sectional analyses of contract pharmacies, and federal audits of covered-entity behavior. Randomized evidence is not realistic for a US statutory drug-pricing program; therefore, high-quality observational research, triangulated with government oversight reports, is the most relevant evidence. We interpret observational findings cautiously, but consistent signals—revenue generation without transparent patient pass-through, higher spending in some oncology settings, and uneven contract-pharmacy benefit—warrant stronger safeguards. The policy response should, therefore, focus on measurable patient benefit rather than assumptions about institutional mission.

Current Use of 340B Revenue Goes Beyond Patient Savings

The scoping review concluded that hospitals, clinics, and pharmacies generate revenue from 340B, whereas manufacturers forgo revenue; it also found mixed evidence on how covered entities use 340B revenue, with reports describing expanded services, practice acquisitions, and expansion into higher-income neighborhoods. The review identified lack of transparency and inconsistent patient cost savings as recurring limitations.³ These limitations are not technical details. They are the core policy problem.

The legislative history changes the policy frame. If hospital eligibility thresholds were partly a product of political compromise rather than a durable patient-benefit standard, then Disproportionate Share Hospital (DSH) percentage, cost-report relationship, nonprofit status, acquired child sites, and contract-pharmacy networks cannot substitute for proof that 340B helps qualifying patients.² The program should be judged against its initial purpose: preserving access to free or discounted drugs and care for safety-net patients, not expanding institutional margin.

Program scale also matters. The CBO estimated that approximately 50,000 facilities participated in 340B in 2021 and that Prime Vendor Program participants purchased $43.9 billion in 340B drugs, up from $6.6 billion in 2010 after adjusting for inflation.⁴ Cancer drugs accounted for $18.1 billion, or 41% of 2021 Prime Vendor Program spending, and hospital-based facilities accounted for 87% of purchases through that channel.⁴ Oncology policy, therefore, cannot treat 340B as peripheral. The magnitude and composition of spending make cancer care a central test of whether the program improves affordability or merely changes where margins accrue.

The oncology-specific empirical literature raises concerns about consolidation and site of care. In a New England Journal of Medicine regression-discontinuity analysis, Desai and McWilliams found that hospital eligibility for 340B was associated with 2.3 additional hematologist-oncologists practicing in hospital-owned outpatient facilities, or 230% more than expected, absent eligibility, without clear evidence of increased care or lower mortality for low-income patients.⁵ Jung et al found that new 340B market entry increased the probability that Medicare cancer drug administration occurred in hospital outpatient departments rather than physician offices by 7.8 percentage points, a 34.8% increase, and increased per-patient spending on other cancer care by $1162, without significantly changing cancer drug use or spending.⁶

Commercially insured patients may also be affected. Chang et al evaluated 95,127 outpatient biologic oncology drug episodes across 478 hospitals. They found that new 340B participation was associated with $4074.69 higher total episode spending in the first year compared with nonparticipating hospitals.⁷ Evidence on safety-net reinvestment is mixed: Desai and McWilliams found no statistically significant increase in uncompensated care after participation, with differential changes of –4.6% for general acute care hospitals and 2.3% for critical access hospitals.⁸ Meanwhile, Milligan et al reported in JCO Oncology Practice that from 2015 to 2022 the number of US medical oncologists increased 14.5%, practices decreased 18.0%, and the mean number of medical oncologists per practice increased 40%.⁹ These trends are multifactorial, but 340B reform should avoid reinforcing migration away from independent community practices and toward higher-cost settings without a documented affordability gain.

Differences in COA vs ASCO Approaches

COA has asked for 340B drug pricing to follow the patient rather than the institution. ASCO’s proposed Indigent Care Ratio (ICR) for independent practices is directionally correct only because it acknowledges that vulnerable patients are treated in community oncology. It is not sufficient reform, and it should not be treated as a substitute for a patient-based qualification standard. The ICR numerator—Medicaid visits, uninsured visits, and dual-eligible Medicare-Medicaid visits—divided by total visits under a single taxpayer identification number (TIN), with eligibility above 11.75%, could identify vulnerable patients treated in community oncology.¹ Yet ASCO should publish the empirical basis for that threshold, the sensitivity of eligibility under alternatives, rural and urban effects, the share of practices that would qualify, and the expected direct patient benefit. More importantly, an ICR should be only a screening tool. Annual validation, single-TIN accounting, plurality of therapeutic cancer care, and exclusion of hospital-owned practices are necessary but insufficient unless each 340B claim is linked to a qualifying patient and a documented patient-facing benefit.

Operationally, any ICR pathway should be paired with a prospective benefit plan and retrospective reconciliation, but patient qualification must remain the governing standard. The numerator should count unique oncology patients or clinically meaningful encounters only when the practice is responsible for the plurality of systemic therapy or longitudinal oncology care, not isolated laboratory, imaging, emergency department, infusion-only, dispensing-only, or consultative encounters. The denominator should include all sites under the same TIN to prevent favorable site selection. Practices should document how 340B savings lowered financial barriers for qualifying patients and should return or redirect unsupported margins. A community-practice pathway should also specify how rural practices, practices with high Medicare but low Medicaid shares, and practices serving substantial underinsured populations are evaluated, because vulnerability in oncology is not captured by Medicaid status alone.

A reconstructed oncology 340B framework should require the discount to follow the vulnerable patient, not the ownership structure. Eligibility should be contingent on audited evidence that 340B-derived margins support direct patient care, including reduced drug cost-sharing where legally permissible, financial navigation, transportation, adherence support, oral oncology pharmacy services, care coordination, survivorship, palliative care, after-hours triage, and services for uninsured and underinsured patients. Institution status alone—including nonprofit status, DSH percentage, Medicare cost-report affiliation, ownership of an outpatient department, acquisition of a community practice, or a contract-pharmacy arrangement—should never be sufficient. Covered entities should report gross acquisition discounts, reimbursement, retained margin, contract-pharmacy and third-party administrator (TPA) fees, pharmacy benefit manager (PBM)-related fees, charity care, uninsured and Medicaid service volumes, cost-sharing reductions, and specific reinvestments in cancer care access. These data should be public, standardized, and audited. Reporting should be concise enough to be feasible for community practices but detailed enough to identify whether margins are funded by access rather than acquisition, expansion, or intermediary fees.

Suggested patient-facing metrics include the number and percentage of qualifying patients receiving reduced cost sharing or free drugs; dollars applied to patient assistance, transportation, lodging, navigation, and oral-oncology adherence; time from diagnosis or relapse to treatment initiation for financially vulnerable patients; avoided emergency department visits or hospitalizations attributable to care coordination; and continuity of treatment after insurance loss or coverage transition. Metrics should be stratified by insurance status, race and ethnicity where available, rurality, and area-level deprivation. The purpose is not administrative burden for its own sake; it is to ensure that a large public drug-pricing privilege produces measurable access for the patients whom 340B was initially intended to help.

The patient definition is the most important policy lever and should be the primary qualification test. A qualifying 340B oncology patient should meet 4 conditions: (1) an active cancer diagnosis or cancer-related supportive-care need, (2) an ongoing clinical relationship with the entity claiming the discount, (3) entity responsibility for the plurality of systemic therapy or longitudinal oncology care coordination, and (4) uninsured, Medicaid, dual-eligible, or underinsured or financially vulnerable status under documented financial-assistance criteria. The discount should attach only to the outpatient drug or oncology service tied to that patient’s treatment plan and only when the 340B benefit reduces a financial barrier or supports documented patient-facing care. Commercial insurance alone should not qualify a claim unless financial vulnerability and patient benefit are documented. A broad payer-agnostic definition may facilitate cross-subsidization, but evidence that commercially insured 340B margins reliably reach low-income patients remains inconsistent.^3,7,8 If margins from commercially insured patients support safety-net care, the transfer should be traceable, auditable, and linked to measurable patient-facing benefit rather than presumed by institutional mission. Conversely, a nonqualifying 340B claim should be explicit. A patient should not qualify solely because an institution owns the site of care, places a clinic on a Medicare cost report, acquires a community practice, employs or contracts with the prescriber, or maintains a contract pharmacy or TPA relationship. A claim should not qualify based only on a one-time consult, lab draw, imaging encounter, emergency department visit, administrative referral, infusion-only encounter, dispensing-only encounter, or prescription unrelated to active oncology care by the entity claiming the discount. These circumstances may lead to institutional spread, but they do not serve the program's patient-centered purpose.

Contract pharmacies require stronger guardrails than simple protection. Nikpay et al found that retail pharmacies participating in 340B increased from 789 in 2009 to 25,775 in 2022, rising from 1.3% to 40.9% of all retail pharmacies; by 2022, 10% of participating pharmacies had 6 or more contracts, and 51% had their farthest covered entity 16 miles or more away.¹⁰ Lin et al found that 340B pharmacy growth was less concentrated in socioeconomically disadvantaged and primarily Black or Hispanic/Latino neighborhoods than might be expected from the program’s safety-net purpose.¹¹ GAO reported that only 30 of 55 reviewed covered entities provided low-income uninsured patients discounts on 340B drugs at some or all contract pharmacies; 25 did not provide discounts at the contract pharmacies.¹² These findings argue for mandatory disclosure of contract terms, caps on intermediary fees, prohibition of margin without access, and point-of-sale benefit for qualifying patients wherever feasible. Contracts should also identify spread retention, dispensing fees, data fees, and any TPA or PBM-linked revenue.

Community oncology has repeatedly argued that 340B discounts should follow the patient rather than the site of ownership or institutional status, and COA has specifically recommended that hospitals receive 340B discounts only when treating underinsured, uninsured, and indigent patients.¹³ That position should be the foundation of reform, not a peripheral stakeholder view. It is not anti–safety net; it is a demand that the safety net be visible, patient-specific, measurable, and accountable. In oncology, the central policy question is not where a drug is purchased or which entity owns the clinic, but whether the discount helps a qualifying patient initiate therapy, remain on therapy, and avoid preventable financial toxicity. A modern program should require all participants—hospitals, grantees, community practices, contract pharmacies, TPAs, and PBM-linked intermediaries—to operate under transparent, enforceable standards that document how 340B savings are translated into direct patient benefit. When participants cannot demonstrate that 340B-derived savings are being used to improve access, affordability, or continuity of care for qualifying vulnerable patients, policy makers should have clear authority to require repayment, impose civil monetary penalties, or consider suspension from participation.

ASCO should go beyond expansion; policy makers should not use the ASCO statement as the final blueprint for oncology 340B. The program needs a complete overhaul: a single patient-centered definition of eligibility; reapplication under contemporary criteria; no automatic qualification based on ownership, DSH status, or contract-pharmacy arrangements; public reporting; annual independent audits; patient-level affordability standards; site-neutral principles; restrictions on intermediary margin extraction; and enforceable protection for vulnerable patients. The fundamental question should not be whether an institution qualifies in the abstract. It should be whether 340B pricing access produces demonstrably better affordability, continuity, and access for a specific financially vulnerable patient with cancer because the discount exists.

Entities receiving 340B pricing access should be expected to demonstrate meaningful service to patients across Medicaid, Medicare Advantage, and other public insurance pathways, not simply benefit from statutory eligibility or ownership status. Without that linkage, 340B risks continuing to function primarily as a financial advantage associated with ownership structure and site-of-care migration rather than as a patient-centered access policy. With that link, it can become what it was intended to be: a transparent, auditable, patient-centered access program.

Author Information

Gordan is a medical oncologist/hematologist, Florida Cancer Specialists & Research Institute, Gainesville, FL; Paulson is a medical oncologist, Texas Oncology, Dallas, TX; Wenk is a medical oncologist/hematologist, Florida Cancer Specialists & Research Institute, Trinity, FL; Fishkin is a medical oncologist/hematologist, Illinois CancerCare, Peoria, IL; Drosick is a medical oncologist/hematologist, Oncology Hematology Care, Cincinnati, OH; Dobbs is a medical oncologist/hematologist, Tennessee Cancer Specialists, Knoxville, TN; Ingram is a medical oncologist/hematologist, Shenandoah Oncology, Winchester, VA; Parikh is a medical oncologist/hematologist, Comprehensive Cancer Centers of Nevada, Henderson, NV; Danso is a medical oncologist/hematologist, Virginia Oncology Associates, Norfolk, VA; Heller is a medical oncologist/hematologist, Southern Cancer Center, Mobile, AL; Bupathi is a medical oncologist, Rocky Mountain Cancer Centers, Littleton, CO; Cosgrove is a medical oncologist/hematologist, Compass Oncology, Vancouver, WA; and Fleming is a medical oncologist, Virginia Oncology Associates, Norfolk, VA.

Corresponding author: Lucio N Gordan, 6400 West Newberry Road, Gainesville, Florida 32605

Disclosures/Funding: No external funding was received for the preparation of this manuscript.

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