Kansas lawmakers are weighing Senate Bill 284 to expand provider access to the federal 340B drug pricing program.

Backers frame it as help for patients, but opponents warn it would supercharge hospital power while shrinking real choice. They argue it would deepen problems already seen in the program—weak oversight, rising costs, and rapid consolidation—without delivering relief to the people it was meant to serve.

The 340B program began in 1992 to help safety-net providers serving uninsured and low-income patients by requiring drugmakers to sell medications at steep discounts.

Over time, it ballooned into the nation’s second-largest prescription drug purchasing program, trailing only Medicare Part D. Estimates put 340B spending at $66.3 billion in 2023, reflecting a dramatic expansion in scope and impact that few envisioned when the law was first written.

Critics say the program no longer fulfills its purpose.

Instead of strengthening local access, they argue it fuels industry consolidation, drives up costs, and reduces care in rural communities. As the program expanded, dozens of rural hospitals closed, while large systems grew their footprints and their revenue streams.

SB 284 would make that trend worse.

The bill would block drugmakers from denying access to certain drugs, reduce transparency, and discourage innovation. It would not stop hospitals from exploiting the spread between discounted acquisition costs and full-price reimbursements billed to insurers or government plans.

Here is how the margin play works.

Once a hospital buys an outpatient clinic, it can mark that clinic 340B-eligible regardless of who the clinic serves. Discounted drugs purchased under 340B can then be billed at full price, and the hospital keeps the difference as profit.

Federal watchdogs have been sounding alarms for years.

The Government Accountability Office and the Office of Inspector General have repeatedly documented oversight gaps. Hospitals are not required to report how 340B revenue is used or whether savings ever reach patients, leaving taxpayers and families in the dark about where the money goes.

Independent clinics feel the squeeze first.

Heavily subsidized systems use 340B profits to fund acquisitions and expansion, not direct patient discounts. Smaller, more efficient providers struggle to compete, sell out, or shut down, and rural patients are left with fewer options and longer drives.

Contract pharmacy networks magnify the reach.

Each participating hospital can partner with hundreds of retail pharmacies, creating sprawling webs that capture 340B discounts far from any needy patient. Mission creep turns a targeted safety net into a revenue engine for billion-dollar systems.

Since roughly 2014, the pattern accelerated as health systems went on a buying spree.

Nonprofit hospitals snapped up local practices, raised prices, and crowded out independents. Spending swelled while subsidies drifted further from the low-income patients the program was designed to help.

The hidden subsidy also obscures the real price of care.

Charges look ordinary to patients and employers, but behind the scenes hospitals pocket the spread. Small businesses, families, and taxpayers ultimately cover the tab through higher premiums and public spending.

Some institutions reportedly used freed-up funds to expand abortion and gender-transition services.

That raises questions about whether 340B revenue is enabling activities that sidestep Hyde Amendment restrictions on federal dollars, even as none of this reduces drug bills for families.

Kansas does not need to lock in a broken system.

Expanding 340B through SB 284 would hand even more leverage to large chains, weaken transparency, and harden the very incentives that drove closures and consolidation. Rural communities would bear the brunt again.

There is another path.

Congress and the Trump administration are working on reforms to 340B and Medicare aimed at curbing waste and corruption. Kansas lawmakers can align with that effort by restoring accountability, competition, and sunlight so that health care serves patients, not institutions.

A well-targeted safety net is worth saving.

A sprawling subsidy machine is not.