On July 15, the Health Resources & Services Administration (HRSA) released the 2025 update to its annual report on 340B covered entity purchases. Drug purchases at discounted 340B prices reached a record of $100 billion in 2025, representing a 23% increase from 2024. This data allows stakeholders to better understand the size of the 340B program and its use by different covered entity types.

The data reported by HRSA is from the Prime Vendor Program, which captures most, but not all, 340B transactions. It shows that disproportionate share hospitals (DSHs) made $79.2 billion in 340B purchases in 2025, accounting for approximately 80% of total 340B drug purchases. The next largest category of purchases was for health center programs, accounting for $5.9 billion (5.9%) of total purchases, followed by children’s hospitals, which made up roughly $2.5 billion (2.5%) of total purchases.

Continued 340B Program Growth and Stakeholder Responses

Over the past decade, the 340B program has grown.

Figure 1. 340B Drug Sales, 2015–2025, in Billions

FQHCs: Federally Qualified Health Centers; RWCs: Ryan White Clinics

Among federally funded government programs, 340B drug spending is second in size only to that of Medicare Part D. 340B purchases are higher than net Medicare Part B and Medicaid spending on prescription drugs. The 340B program growth has prompted manufacturers to impose contract pharmacy restrictions and lawmakers to increase attention to program reforms (e.g., Senator Bill Cassidy’s (R-LA) discussion draft and the bipartisan SECURE 340B Act).

340B Reform is On the Agenda

In 2026, 340B remains a policy focus, with federal lawmakers advancing bipartisan reform proposals, ongoing manufacturer restrictions on contract pharmacy access, and continued litigation and regulatory actions centered on program transparency and compliance requirements. In tandem, hospitals, health systems and safety-net providers have encouraged efforts to strengthen program governance and integrity, advocating for policies that preserve patient access while adapting to an increasingly complex environment. addition, HRSA is advancing plans for a 340B Rebate Pilot Model that would allow for retrospective 340B discounts on products subject to Medicare negotiation, starting in 2027.

Staying ahead of the latest trends and 340B policy developments will be critical for all stakeholders looking to engage in a 340B reform conversation in the future. To learn more about how Avalere Health can support you on 340B policy and strategy, connect with us.