The Financial Impact to Medicare from the 340B Drug Pricing Program (October 2025)
Medicare is a federal health insurance program primarily for people ages sixty-five and older, as well as certain younger individuals with disabilities. Medicare Part B covers outpatient medical services, including physician-administered drugs, preventive care, and durable medical equipment. Medicare Part D provides prescription drug coverage primarily for self-administered drugs dispensed by pharmacies, offered through private plans approved by Medicare.
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In July 2025, BRG researchers published a brief on the fiscal impact of the 340B Drug Pricing Program (“340B program”) on Medicaid. That brief found that in 2024, rebates collected through the Medicaid Drug Rebate Program (MDRP) would have been an estimated $6.5 billion higher in the absence of the 340B program. Of this amount, $2.3 billion impacted state budgets directly. The impact of the 340B program on federal programs goes beyond Medicaid and affects Medicare, which we explore in detail in this brief.
This study was funded by the Pharmaceutical Research and Manufacturers of America.
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