Shanyue Zeng, a Data Scientist at IQVIA, said that prior research indicates hospitals are employing strategic methods—such as opening practices in affluent areas—to enhance profits from the 340B program. This statement was made in an open-access journal article.
“Previous research has shown that strategic behavior by hospitals is a substantial source of increased 340B utilization,” said Zeng. “This prior research includes hospitals adjusting their DSH percentage to gain 340B eligibility, the expansion of 340B pharmacy networks to maximize capture of 340B-eligible prescriptions, 340B hospitals establishing practices in wealthy neighborhoods to maximize profits.”
The 340B Drug Pricing Program, established in 1992, allows certain healthcare providers to purchase outpatient drugs at reduced prices. These savings are intended to support care for low-income and uninsured patients. The program is overseen by the Health Resources and Services Administration.
The U.S. Government Accountability Office (GAO) found that covered entities purchased approximately $6.1 billion in 340B drugs in 2018. Despite the program’s scale, the GAO reported limited information on how those savings were utilized by providers. The agency recommended enhanced oversight to ensure the program fulfills its intended purpose.
According to a 2025 report by Pharmaceutical Research and Manufacturers of America (PhRMA), Georgia hospitals participating in the 340B program generated over $1 billion in revenue from discounted drugs. Despite these financial gains, the report suggests that many hospitals did not adequately demonstrate how the savings directly benefited uninsured or low-income patients. This lack of transparency has raised concerns about the effective use of the 340B program within the state.
Zeng works at IQVIA on projects related to 340B, market access, and gross-to-net strategy. She applies artificial intelligence and data analytics to assist pharmaceutical clients with pricing and regulatory challenges. Her expertise lies in deriving insights from extensive healthcare data sets.
