New York City has long stood at the center of New York’s fight to expand healthcare access. Our boroughs, especially in Hispanic communities, face some of the highest rates of chronic illness in the state, and families here often carry a disproportionate share
of healthcare costs.
For that reason, policies affecting healthcare affordability must always be evaluated through one central question: do they truly help patients and the communities they are meant to serve? That question is especially important as lawmakers consider a proposal included in the State Senate’s One-House Budget that would expand the use of the federal 340B Drug Pricing Program.
We share the State Senate’s commitment to improving healthcare outcomes for NYC residents.
However, expanding the 340B program without first addressing serious transparency gaps risks creating unintended consequences for patients, employers, and taxpayers alike.
The 340B program was created to allow certain hospitals and healthcare providers to purchase prescription medicines at significant discounts. The intent was clear: providers could use those savings to stretch scarce resources, support vulnerable populations, and
expand services for underserved communities.
But over time, the program has grown dramatically in size and complexity, and oversight has not kept pace.
In New York, recent data has raised legitimate concerns about how the program is functioning in practice. One analysis found that between 2024 and 2025, 340B providers marked up discounted medicines by an average of 148%, generating an
estimated $118.4 million in additional costs for New York State employee health plans and their enrollees.
That translated to roughly $127 more in out-of-pocket costs per enrollee, affecting teachers and other public servants across the state. When healthcare programs lead to higher costs for working families, policymakers have an obligation to pause and examine whether the system is operating as intended.
Evidence from other states further illustrates how large and complex the program has become. In Minnesota, for example, 340B hospitals and providers generated at least $1.34 billion in net revenue from 340B prescriptions in 2024 alone, receiving $3.04
billion in reimbursements for drugs that cost $1.53 billion to acquire.
Even that figure may underestimate the program’s true size due to challenges in tracking certain medications. The data also revealed that a small share of hospitals captured the vast majority of program revenue. Disproportionate share hospitals accounted for just 12% of participating entities but more than 80% of statewide 340B revenue, while nearly half of contract pharmacy arrangements were with out-of-state pharmacies.
Analysts also noted that certain high-margin drugs appear to generate disproportionate revenue within the program—raising concerns that financial incentives could influence prescribing patterns or contribute to rising healthcare costs.
These findings highlight a fundamental issue: policymakers still lack a clear and consistent understanding of how 340B revenues are generated and how they are ultimately used.
For New Yorkers, that uncertainty matters. Our boroughs’ small businesses, employers, and working families are already navigating
rising healthcare costs. Expanding a program of this scale without clear reporting requirements could unintentionally increase financial pressures on health plans, employers, and patients— while offering no guarantee that additional revenue will be reinvested in local care.
Before expanding the 340B program, New York should first establish strong transparency and accountability standards. Policymakers and the public should be able to see how much revenue participating institutions generate through the program and how those funds are being used to improve patient care, expand services, and strengthen community health.
The goal should not be to weaken the healthcare safety net. It should be to ensure that programs designed to help underserved communities are actually delivering measurable benefits.
We deserve policies that are both compassionate and accountable. Before expanding 340B, lawmakers should ensure that transparency comes first.
Cindy Rubi Estrada is the executive director of the New York City Hispanic Chamber of Commerce.
