The Inflation Reduction Act (IRA) is unintentionally pushing the 340B program into a new “era of transparency and accountability,” influential drug supply chain analyst and longtime 340B critic Adam Fein recently predicted.
Fein, president of the industry research firm Drug Channels Institute, made the comments during a June 12 webinar on 340B program trends and controversies. He predicted the IRA would push more visibility into 340B claims, and that federal regulators and courts—but not Congress—will continue to drive many of the largest program changes.
“We are going to see a world of much more transparency and much more visibility into 340B utilization,” Fein said. “That is going to be a positive for manufacturers, and they’re going to fight pretty hard to get this, but I think it’s inevitable.”
Fein has frequently criticized the 340B program’s growth and structure, particularly the role of large hospitals and contract pharmacies. HMP Global, a healthcare events and market insights firm, owns Drug Channels Institute. Fein said he would be leaving Drug Channels Institute at the end of 2026 and turning it over to “the next generation to carry things forward.”
Fein told 340B Report that nearly 3,500 people registered for the event and estimated that about two-thirds of registrants came from the drug industry. The remainder were largely made up of other drug supply chain participants, including pharmacy benefit managers (PBMs), wholesalers, pharmacies, hospitals, insurers and others, he said.
IRA Driving 340B Change
Fein argued that operational challenges with the IRA’s Medicare drug price negotiation program will force regulators and manufacturers to require more visibility into 340B claims.
Under the IRA, manufacturers must offer 340B providers the lower of the negotiated “maximum fair price” (MFP) or the 340B ceiling price—but not both. The first 10 MFPs took effect Jan. 1, and more MFPs will take effect in subsequent years.
Fein argued the law creates operational challenges for manufacturers because they often do not know whether an individual claim is subject to upfront 340B pricing, an MFP refund or a rebate to the state under Medicaid. He described the issue as a potential “triplicate discount” problem.
“The IRA is forcing [the Centers for Medicare and Medicaid Services] to get serious about 340B, and it’s forcing the industry to get serious about solving it,” Fein said.
Fein’s colleague Tyler Novotny, Drug Channels Institute’s senior vice president, argued that the Health Resources and Services Administration’s (HRSA) efforts to implement a 340B rebate pilot were part of a broader shift toward more 340B transparency.
HRSA on June 12 indicated it would attempt to implement a 340B rebate pilot for drugs subject to MFPs in 2027, after federal courts blocked the agency’s original pilot from taking effect Jan. 1.
“It’s not a matter of if, but it’s more a question of when,” Novotny said of a 340B rebate model.
Manufacturers have argued that 340B rebates would improve program transparency and help prevent duplicate 340B-MFP discounts. Providers have opposed rebates, arguing they would increase administrative burden and divert resources away from caring for vulnerable patients. Bipartisan members of Congress have signed letters opposing 340B rebates and introduced a bill to exempt community health centers from rebates in response to provider pushback.
Contract Pharmacy Scrutiny
Fein argued that 340B contract pharmacies and their integration with PBMs, specialty pharmacies and third-party administrators (TPAs) are likely to draw more 340B program scrutiny. He said the three largest retail pharmacy chains—CVS, Walmart and Walgreens—and the three largest PBMs—CVS Caremark, Cigna’s Express Scripts and UnitedHealth Group’s Optum Rx—controlled 77% of all 340B contract pharmacy relationships.
“There’s going to be a lot more scrutiny of the contract pharmacy arrangements, especially given the number of large for-profit mega corporations that appear to be profiting significantly off this program,” Fein contended.
Fein also predicted that broader drug pricing trends—including manufacturers lowering list prices in response to the IRA and other policies—could reduce 340B margins for covered entities and fees available to contract pharmacies.
Fein said hospitals were responding to the growing number of manufacturer contract pharmacy restrictions by opening up more in-house specialty pharmacies. He described new manufacturer policies requiring in-house pharmacy claims data as “the next level of battle” in the 340B program and cited 340B Report’s tracker of these new policies.
Payers ‘Starting to Wake Up’
Fein said the 340B program is often framed as “a battle between hospitals and manufacturers,” but argued that often employers and payers “are the ones who are losing out.” He said payers can lose manufacturer rebates when a prescription is later identified as a 340B claim.
“One of the things driving benefit costs has been 340B contract pharmacies,” Fein said. “Payers are just starting to wake up to this.”
Fein said some employers are pushing for more 340B transparency—including through recent congressional testimony—while others are trying to share 340B savings through arrangements involving private companies and covered entities.
Fein closed by predicting that—even without congressional action—regulatory agencies, courts and broader drug pricing trends will push the 340B program toward greater transparency.
“340B is on the cusp of change, and that change is going from an era of expansion and opacity to an era of transparency and accountability,” he said. “I think it’s inevitable.”
