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Abuse of the 340B drug discount program is contributing to the rising cost of employer-sponsored insurance and must be reformed, the NAM told the Department of Health and Human Services recently.

What’s going on: While manufacturers appreciate the program’s original intent—to offer affordable medical care and prescriptions for low-income and underserved populations—340B’s “rapid and massive expansion … has contributed significantly to the rising costs of health care for manufacturers in America,” the NAM said in response to a request for information on a possible 340B rebate model pilot program.

• The NAM noted that “the expansion of th[e] program was associated with approximately $23 billion in additional employer-based healthcare expenses in 2023, of which employees paid about $4.5 billion per year in added insurance premiums. That equals approximately $137 in additional annual premium costs for single coverage and $415 for family coverage, or about 8% of the overall increase in employer-based premiums over that period.”
• In the NAM’s Q4 2025 NAM Manufacturers’ Outlook Survey, 94% of manufacturers said they either expected or had already seen higher health care premiums in 2026, with 11% saying they had seen an increase of over 20%.
• That’s “an unsustainable increase that neither manufacturers nor manufacturing workers and their families can afford,” the NAM told HHS. Reforms to the 340B program could help reduce these costs.

What must happen: The Health Resources and Services Administration’s Office of Pharmacy Affairs should establish a 340B rebate model pilot program, such as the one it recently proposed, the NAM said.

• Such a pilot “will increase transparency, which will help inform reforms to the 340B program and enable manufacturers to take advantage of negotiated rebates and lower health care costs,” the NAM said.

Manufacturers contribute: “The NAM would be pleased to work with OPA on a pilot program to ensure manufacturers and their workers are not disadvantaged by the 340B program, while ensuring original congressional intent to expand care for low-income and underserved populations,” concluded NAM Director of Health Care Policy Jess Wysocky and NAM Vice President of Domestic Policy Jake Kuhns.