September 16, 2025

Mr. Eric J. Soskin
Senior Advisor to the Governor
Office of Governor Ron DeSantis
Florida State Capitol
400 South Monroe Street
Tallahassee, Florida 32399

Dear Mr. Soskin,

We, the undersigned organizations, appreciate and support the efforts of the Florida DOGE Task Force to reduce wasteful spending and increase efficiency across the state government.  We suggest that this effort include a review and proposed reforms to Florida’s participation in the federal 340B Drug Pricing Program, given its significant impact on patients, taxpayers, and employers, and welcome the opportunity to discuss this issue in more detail with the task force.

The 340B program was created by Congress in 1992 to help federally funded clinics and public hospitals that serve a large uninsured population cover the cost of drugs and provide discounts to patients.  The 340B covered entities (CEs) include federally funded health clinics and non-profit disproportionate share hospitals (DSH) which receive supplemental federal funds in proportion to the number of low-income Medicare and Medicaid patients and uninsured indigent patients they serve.

However, the lack of clear intent and definition of a patient, along with poor oversight, have led to the program being exploited by hospitals and contract pharmacies to generate millions of dollars in profit.  Articles in the Ohio Capital Journal and the New York Times have revealed that 340B hospitals have been siphoning money from low-income areas to wealthier communities and spending their 340B profits on generous administrator salaries, luxurious amenities, and other projects unrelated to providing drug discounts to patients.  An April 24, 2025 Senate Health, Education, Labor and Pensions (HELP) Committee Majority Staff report on 340B, under Chairman Bill Cassidy (R-La.), analyzed how it is being abused and identified necessary reforms.  Since 340B is a federal program, essential reforms like a patient definition should be done by Congress, while the states play a key role in requiting greater transparency and accountability for program expenditures.

The impact of 340B on states has been analyzed by IQVIA.  Their 2023 study revealed 340B costs Florida taxpayers $43 million annually and employers and workers $246 million annually.

States have also provided information about the program.  A May 8, 2024, North Carolina State Treasurer report found that covered hospitals billed the North Carolina State Health Plan more than 80 percent more for certain cancer drugs compared to non-340B hospitals. In one example, a drug costing the covered hospital $7,985 was billed to the state for $21,512.  A November 25, 2024, Minnesota Department of Health (DOH) report on 340B covered entities, which was the first state-based analysis of its kind, found that hospitals in the state received at least $630 million in 340B revenue in 2023.  But that may only be half of total 340B revenue in the state based on national data for the program.  The report found that the largest hospitals, which equal 13 percent of the participating hospitals, received more than $500 million, or 80 percent of the revenue.  The highest profit from 340B was $129 million at M Health Fairview University of Minnesota Medical Centers.  That was not the case for federal safety-net grantee clinics, which generated the least net 340B revenue, and some showed a loss.  Floridians deserve at least the same level of transparency provided in the North Carolina and Minnesota reports.

We urge the DOGE Task Force to analyze how 340B is working in Florida, its impact on taxpayers and healthcare, and what could be done to increase accountability and transparency.  The task force’s recommendations can provide Florida legislators and Governor DeSantis with a plan of action on 340B that would help prevent abuse and provide the drug discount benefits to indigent patients that Congress intended to help when the program was established.

Thank you for your attention to this important issue.  We look forward to working with the DOGE Task Force to protect Florida taxpayers and help patients.

Sincerely,

Tom Schatz
President
Citizens Against Government Waste

Karen van Caulil
President and CEO
Florida Alliance for Healthcare Value
and Floridians for Accountability in Health Care

Doug Wheeler
Director of the George Gibbs Center for Economic Prosperity
James Madison Institute

Shawn Gremminger
President and CEO
National Alliance of Healthcare Purchaser Coalitions