By Kevin M. Kerwin, Esq. | February 23, 2026
State policymakers must act to pass the 340B Anti-Discrimination Act (S.1913 / A.6222)
More than thirty years ago, through a bipartisan effort, Congress created the 340B program to help safety-net providers stretch scarce federal resources. Pharmaceutical manufacturers got access to Medicaid and Medicare formularies, which meant millions of publicly insured patients and billions in stable revenue. In exchange, they agreed to provide discounted outpatient drugs to safety-net hospitals and clinics. The goal is to preserve access to healthcare services.
The arrangement is straightforward. Drug companies gained entry to the largest public insurance markets in the country, and as intended by Congress, safety-net providers got discounts they could reinvest into patient care. Both sides benefited and had obligations.
Now, many pharmaceutical manufacturers no longer want to uphold their end of the bargain. They are restricting 340B access while continuing to benefit from Medicaid and Medicare pharmaceutical sales, even as Upstate and rural hospitals face historic fiscal uncertainty.
Meanwhile, the pharmaceutical industry is booming. Between 2000 and 2018, 35 of the largest pharmaceutical companies reported gross profit margins above 75%[1]. Consider that 62% of IHA member hospitals are operating with negative or razor-thin margins. 340B helps hospitals cover costs using pharmaceutical discounts, not taxpayer dollars. The financial strain on rural hospitals has real consequences for patients and communities.
What 340B Means in Upstate and Rural New York:
At Nathan Littauer Hospital, the sole community hospital in Fulton County, New York, 340B funds are vital to supporting basic services, including maternity and emergency care. As a hospital serving a disproportionate number of uninsured and underinsured patients, Littauer is exactly the type of organization the 340B program was designed to benefit. We need 340B dollars to stretch our limited resources without creating additional taxpayer burden. Additionally, 340B funds allow Littauer to implement creative programs that expand patient access, direct care to the most appropriate setting, manage chronic conditions, and lower the overall cost of care. 340B gives manufacturers access to Medicare and Medicaid in exchange for providing discounts to under-resourced organizations, while still allowing manufacturers to set prices, thereby ensuring drug company profits. There are no such safeguards for the services we provide, as the government specifies the reimbursement we receive. Nearly all of the recent changes to the program, unilaterally implemented by big Pharma, are designed to stop providing discounts while maintaining the same access to Medicare and Medicaid, adding to their record profits. The proposed changes are not about drug companies feeling that patients aren’t benefiting from the 340B program; they are about corporate greed at the expense of our community. – Sean M. Fadale, MBA, FACHE – President & Chief Executive Officer, Nathan Littauer Hospital and Nursing Home
At Guthrie Cortland Medical Center, 340B is more than a policy; it is a community investment. With more than two-thirds of our patients covered by Medicare or Medicaid, reimbursement often does not meet the full cost of care. 340B helps us responsibly close that gap while continuing to serve all patients. Every dollar saved is reinvested into services our community depends on, especially those that are essential but operate on narrow margins, including behavioral health, chronic disease care, and labor and delivery. Maintaining that local access strengthens not only health outcomes, but the vitality of our entire region. Simply put, 340B allows us to turn savings into care, supporting our mission and community health. – Jennifer L Yartym, MSPT, MBA, SVP, NY Regional Hospital Operations, President, Guthrie Cortland Medical Center
Recently, the pharmaceutical industry has been working to discredit the 340B program by characterizing its use as fraudulent or misused. In many cases, the groups enlisted to spread the message may not have direct knowledge of the compliance requirements or how 340B savings are used in hospital settings. These tactics risk eroding public trust in hospitals and support for a program that helps rural and underserved communities maintain access to care, while adding to pharmaceutical company profits.
The 340B Anti-Discrimination Act (S.1913 / A.6222) would prohibit pharmaceutical manufacturers from restricting hospital access to 340B discounts. It protects hospitals ability to serve patients and sustain access to care.
The legislation would honor the original intent of the program that gave pharmaceutical manufacturers access to Medicaid and Medicare pharmaceutical markets in exchange for helping sustain safety-net providers. If access to 340B continues to be restricted, hospitals will face tough choices: cut services or turn to the state to fill the gap.
Protecting 340B means protecting maternal healthcare, oncology services, and the rural hospitals that communities cannot afford to lose. State policymakers must act to pass the 340B Anti-Discrimination Act.
Kevin M. Kerwin, Esq., is President and CEO of the Iroquois Healthcare Alliance, which represents more than 50 hospitals and health systems across 32 counties of Upstate New York. For more information, visit iroquois.org.
[1][Ledley FD, McCoy SS, Vaughan G, Cleary EG. Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies. JAMA. 2020;323(9):834–843. doi:10.1001/jama.2020.0442. https://jamanetwork.com/journals/jama/fullarticle/2762308