How 340B Expansion Is Costing Manufacturers Billions in Medicaid Rebates

As 340B Expands, Manufacturers Are Losing Billions in Rebate Value

A recent analysis from BRG, commissioned by PhRMA, found that the 340B program diverted an estimated $6.5 billion in Medicaid rebates in 2024. These funds would have otherwise flowed to states and managed care organizations.

What the Study Shows:

  • $4.2B in lost federal managed care rebates

  • $2.3B in lost state rebate revenue

  • State-level losses include:
    • Pennsylvania: $265M
    • Illinois: $238M
    • Massachusetts: $190M
    These states were selected for their significant losses and outsized influence on future 340B policy debates.

Tensions Are Rising Across the Ecosystem:

  • ❌ Hospitals say 340B savings fund critical community care

  • ❌ States say they’re losing vital Medicaid revenue

  • ❌ Manufacturers are footing the bill — with limited visibility into how discounts are applied

What Does That Mean for Manufacturers?

You’re still delivering steep discounts, but often outside of your negotiated rebate contracts. That’s:

  • Eroding rebate ROI

  • Complicating GTN forecasting

  • Inviting more scrutiny from state governments and internal finance teams

How eMAX Health Helps

At eMAX Health Systems, we help market access teams adapt in real time through:

  • Payer insight tools

  • Contracting ROI models

  • Elasticity™ pricing modules

All of this is embedded in our proprietary MAVA® platform, built to help you stay ahead of policy-driven risk.

How is your team evolving its contracting strategy as 340B continues to scale?