The pharmaceutical lobby is ramping up its opposition to nonprofit health systems’ expanding use of the 340B Drug Discount program with the launch of an advertising campaign describing the subsidies as “a hidden tax on patients, employers and taxpayers.”
The Pharmaceutical Research and Manufacturers of America’s (PhRMA’s) campaign, called “Meet Mark,” targets the Washington, D.C., market with a combination of videos and other materials running on television, digital and social media platforms. The seven-figure campaign is set to run through the end of the year, the group told Fierce Healthcare.
“When hospitals have free rein to mark up medicines, everyone pays the price,” PhRMA wrote in a release outlining the campaign. “It is time to stop tax-exempt hospitals from rampantly abusing the program and ensure that the program benefits low-income patients by lowering their medicine costs.”
In a 30-second video, two individuals portrayed as leaders within a 340B hospital’s billing department discuss an exceptionally tall employee named Mark who “works on 340B medicine mark-ups.” Mark is shown giving a presentation next to a chart outlining steep hospital profits due to heightened prices charged on drugs acquired at a discount through the program.
“As a nonprofit, we might pay a penny for a medicine,” one leader explains to the other. “Mark bumps it up to thousands of dollars—and we pocket the difference.”
“I hear we’re buying up small hospitals, too,” the other leader responds.
“More medicines to mark up,” the first says, giving Mark a thumbs-up.
The video ends with a message from PhRMA urging viewers to “tell Congress to fix 340B.”
PhRMA’s campaign is the latest salvo in a fight between the sectors over a decades-old program requiring discounted drug purchases for safety-net providers.
Use of the program has expanded substantially during the past decade, with more than 60,000 total covered entities (eligible hospitals and contract pharmacies) participating in the program as of early 2025. In 2023, about $66.3 billion in discounted outpatient drugs purchased through the program would have run $124.1 billion if purchased wholesale.
Drugmakers have described the uptick as a departure from Congress’ intent for the program and have attempted to impose restrictions on the discounts—such as limits on dispensing through multiple contract pharmacies or after-the-fact rebates—to combat what they describe as hospitals’ abuse. They’ve also highlighted widespread use of the discounts among larger, financially stable nonprofit health systems and the funds collected by contract pharmacies and third-party administrators participating in the program.
Providers, meanwhile, contend that their increased use of the program’s discounts is necessary to counter rising expenses and ensure that low-income patients maintain their access to treatment. Some proposed reforms, such as the rebates, could severely limit the liquidity of smaller rural hospitals, they warned.
The American Hospital Association (AHA), which represents the hospital industry, has broadly contested the pharmaceutical industry’s claims and advocates against restrictions on providers’ use of the program.
"Classic PhRMA. Shifting the blame for high drug prices misses the Mark," an AHA spokesperson told Fierce Healthcare in response to the new ad campaign.
Momentum on the contentious issues appears to have swung in drugmakers’ favor during 2025. A recent investigation and report on the program conducted by Sen. Bill Cassidy, M.D., R-La., called for “much-needed” legislative reforms around transparency and oversight, including detailed annual reports from providers on how they are using 340B revenues for the benefit of patients.
The Trump administration, meanwhile, announced plans to launch a pilot program that would test the rebates approach drugmakers unsuccessfully had tried to impose on their own. The experiment is set to begin in 2026 for a limited number of products. While applauded by PhRMA and the broader pharmaceutical industry, the AHA recently described the pilot as a doomed-to-fail misstep and called for more explicit guardrails against increased administrative burdens and improper rebate denials.