In his first public remarks on the 340B Drug Pricing Program, newly appointed Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. described the program as “not straightforward”—yet acknowledged that it remains the lifeblood for rural hospitals.
Speaking before the U.S. House Appropriations Committee’s Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, Kennedy was asked about reports that the department may shift 340B oversight from the Health Resources and Services Administration (HRSA) to the Centers for Medicare & Medicaid Services (CMS). Citing an ongoing court order tied to a broader departmental reorganization, he declined to confirm or deny the change.
His comments offer insight into how the new administration may approach the program and what covered entities might want to monitor moving forward.
“The 340B program, as you know, is not a straightforward program because it was originally intended for 100 institutions that were serving very poor communities. It’s now grown to 27,000 institutions—and actually 100,000 if you include satellite facilities,” Kennedy stated.
This rapid expansion reflects the increasing pressure on safety-net providers to serve more patients with fewer resources. Yet the program’s complexity, layered with manufacturer-imposed restrictions, evolving reporting demands, and third-party software challenges, has become a point of tension—especially for administrators tasked with managing compliance and financial performance.
Kennedy also mentioned a common talking point from the pharmaceutical industry, noting that patients “seldom get the benefits of the drug reduction.” While this argument often fuels calls for reform, many 340B advocates argue that the program’s value lies in indirect patient benefit—funding that enables hospitals to provide uncompensated care, sustain outreach services, or keep rural facilities open.
As Kennedy himself acknowledged:
“We also recognize that [340B] is the lifeblood of rural hospitals right now, so we can’t mess with that program without giving those rural hospitals something else that is going to support them—and we understand that.”
While no formal plan has been confirmed, speculation continues around whether oversight of 340B will move from HRSA’s Office of Pharmacy Affairs to CMS. Such a move could fundamentally change how the program is administered, especially if CMS applies its traditional reimbursement-focused framework to a program that was designed to function independently of Medicare and Medicaid payment structures.
Kennedy also noted concerns from drug manufacturers about potential drug pricing reforms under the Trump administration’s “most-favored nation” executive order—suggesting that lower list prices could further reduce the ceiling prices used for 340B drugs, something manufacturers view as an “existential” issue.
At RxTrail, we work directly with hospitals, health centers, and covered entities navigating the very complexity Kennedy described. We agree: the program isn’t simple. But it’s effective. And more importantly, it’s essential.
Rather than shrink or reconfigure the program hastily, we believe now is the time to:
Whether oversight changes or not, covered entities deserve partners who can help them adapt, optimize, and continue delivering care to the communities who need it most.
