Anthony DiGiorgio, Assistant Professor of Neurological Surgery at the University of California, San Francisco Medical Center, said on May 13 that the federal 340B drug pricing program is contributing to consolidation pressures in oncology by giving hospital systems pricing advantages not available to independent practices.
“340B has helped crush independent oncology practice. Large hospital systems that qualify for 340B can acquire outpatient drugs at steep discounts while independent oncologists, often caring for the same vulnerable patients, cannot. In oncology, where drug costs are enormous, that matters. It tilts the economics toward hospitals, accelerates consolidation, and makes independent practice harder to sustain. 340B is basically a hidden safety net subsidy run through drug acquisition spreads. It is opaque. It rewards institutional capture,” DiGiorgio said in a social media post.
The 340B program requires drug manufacturers to sell outpatient drugs at discounted prices to eligible safety-net hospitals and clinics. It was designed to help providers serving low-income and uninsured patients stretch limited resources, but discounts are applied to covered entities rather than directly to patients, according to JAMA Health Forum.
At an October 2025 Senate HELP Committee hearing, Chairman Bill Cassidy said participation in the program had “ballooned with limited oversight,” raising questions about how program revenue is used and whether it benefits low-income patients. The Government Accountability Office (GAO) has also identified ongoing oversight weaknesses, including issues with audit processes and eligibility compliance.
The Community Oncology Alliance reports that hospitals participating in 340B have accounted for a large share of community oncology practice acquisitions in recent years, with more than 1,700 community oncology practices closing or facing financial difficulty since 2008.
Anthony DiGiorgio is an assistant professor in UCSF’s Department of Neurological Surgery and serves as Director of Spinal Neurotrauma at Zuckerberg San Francisco General Hospital and Trauma Center. His UCSF profile lists Medicaid policy and access to care among his policy research interests.
