Early last month ASCO published an updated policy statement on the 340B Drug Pricing Program in JCO Oncology Practice.1
The update proposes a package of recommendations to expand practice eligibility, address potential abuses, and ensure the 340B program benefits the patients it was intended to serve.
340B was established in 1992 to improve access to prescription drugs for low-income and uninsured patients by allowing qualifying hospitals and other providers that serve these patients to purchase certain medications from manufacturers at discounted prices. Following Medicaid expansion under the Affordable Care Act, the program has become the second-largest federal drug discount purchasing program in the United States after Medicare Part D.
Eric J. Small, MD, FASCO
“Since drug therapies are a fundamental part of cancer treatment, the 340B program plays an important role helping more Americans access high-quality cancer care,” said 2025-2026 ASCO President Eric J. Small, MD, FASCO. “That said, reforms focused on eligibility, transparency, and accountability are needed to reflect modern health-care delivery and to ensure the program continues to benefit the vulnerable people it was designed to help.”
ASCO offers the following recommendations that, when implemented in tandem, will reform and improve the 340B drug pricing program:
Eligibility
Determining Practice Eligibility: A new formula, the proposed Indigent Care Ratio, would allow non-hospital-affiliated providers, such as independent oncology practices, to participate in 340B if they meet a specific criterion.
Child Sites: Independent oncology practices with multiple locations should be able to register a child site for the 340B program if they bill under the same Tax ID number as the eligible parent practice.
Protecting Contract Pharmacy Access: Covered entities should be able to contract with multiple pharmacies, with caps on administrative fees, to support rural and underserved areas and ensure savings are preserved for patient care.
Transparency and Accountability
Ensuring Accountability: Reporting and auditing requirements for 340B covered entities should increase.
Strengthening Transparency and Accountability: Documentation of how 340B savings are reinvested into patient care should be mandatory and available to the public. All participating entities, regardless of tax status, should meet financial assistance criteria similar to IRS 501(r) standards.
Reporting Enforcement: Entities that fail to demonstrate transparency or to direct savings back into direct patient care should be subject to rigorous enforcement, including the use of Civil Monetary Penalties.
Closing the Orphan Drug Loophole: Orphan drugs, when used for common conditions in Critical Access Hospitals and other rural facilities, should be eligible for 340B pricing.
Defining the Patient-Entity Relationship: The definition of a patient should require an ongoing clinical relationship with the covered entity, ensuring the program’s integrity without excluding insured patients who benefit from comprehensive oncology services.
Funding 340B Reforms: The Department of Health and Human Services secretary or federal policymakers should either appropriate funds or implement other funding mechanisms to support reformed program oversight and operations.
The Indigent Care Ratio
Currently, 340B is not available to community-based, non-hospital-affiliated providers, such as independent oncology practices that lack in-patient facilities, even if those providers serve significant low-income patient populations.
“More than half of Americans receive cancer care in community-based oncology practices,” said Dr. Small. “These practices form the backbone of cancer care delivery in many rural and underserved areas, where they are often patients’ only access to such care.”
To address this, ASCO proposes establishing an Indigent Care Ratio (ICR) to determine 340B practice eligibility. Using ICR, practices that meet a specific threshold of care for Medicaid, uninsured, and dual-eligible patients would be able to benefit from the program.
ASCO recommends keeping the current 340B formula in place for hospitals seeking 340B status, but the Society asserts that the combination of the existing criteria with the new ICR will more effectively determine which practices are serving vulnerable populations with cancer.
ASCO’s prior policy statement on 340B published in 2014.2 The revised statement is the first update to ASCO’s 340B policy in more than a decade, addressing the program’s exponential growth and the evolving landscape of oncology care.
DISCLOSURE: To view the full policy statement and to view full disclosures for all authors, visit https://ascopubs.org/doi/10.1200/OP-26-00105.
References
1. Polite B, Dixit N, Hennessy J, et al: 340B Drug Pricing Program: An Updated ASCO Policy Statement. JCO Oncol Pract May 5, 2026
2. Policy Statement on the 340B Drug Pricing Program by the American Society of Clinical Oncology. JCO Oncol Pract 10:259-263, 2014.
