Study Finds Minnesota Hospitals Channel 340B Drug Profits into Investments Instead of Patient Care
- Mar 26
- 2 min read
MILWAUKEE (March 26, 2026) -- Hospitals in Minnesota participating in the federal 340B Drug Pricing Program are directing tens of millions of dollars from the program into financial investments rather than expanding care for vulnerable patients, according to a new analysis by Dr. Lisa Grabert, a health policy researcher at Marquette University.
On average, Minnesota hospitals in the program invested $52.2 million in stocks and bonds, more than three times the $14.2 million that hospitals that do not participate.
"The 340B program was intended to strengthen the healthcare safety net," Grabert said. "But in Minnesota, too many hospitals are using it to generate revenue and build their investment portfolios, rather than improving access to care for vulnerable people."
Established in 1992, the 340B Drug Pricing Program allows hospitals serving large numbers of low-income and uninsured patients to purchase prescription medicines at steep discounts. In return, those providers are expected to use the savings to support care for underserved communities.
Grabert’s analysis points to a different outcome. By purchasing discounted drugs and billing insurers at higher rates, hospitals are able to generate substantial margins -- and increasingly direct those funds outside direct patient care.
Among the study's key findings:
Higher revenues, little added patient benefit
Minnesota’s 340B hospitals reported average revenues of $513 million, compared with $482 million at non-340B hospitals.
Charity care does not increase
Despite higher revenues, 340B hospitals provided no greater share of charity care than hospitals outside the program.
Rewarding executives, not workers.
340B hospitals employed fewer full-time staff on average and paid workers no more than non-340B hospitals.
One hospital paid its CEO $5.6 million -- 60 times what the average nurse earns.
The findings raise questions about whether the 340B program is delivering meaningful benefits to patients or functioning primarily as a revenue stream for hospitals.
"It’s deeply concerning to see hospitals generating large financial gains from a program meant to help vulnerable patients -- while directing those funds into investment accounts," said Dr. Mike Kapsa, a member of the board of directors of Community Action for Responsible Hospitals, the nonprofit coalition that sponsored the research. "Minnesota families deserve transparency to ensure these resources are improving care, not financial returns."
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