Study: Illinois Hospitals Using Federal Drug Discount Profits to Boost Investments

MILWAUKEE (March 12, 2026) -- Illinois hospitals participating in the federal 340B Drug Pricing Program are generating significantly higher revenues and investing far more money in stocks and bonds than other hospitals, according to an analysis published today by health policy researcher Dr. Lisa Grabert. 

The study finds that Illinois hospitals participating in the program reported 41% higher patient revenue than non-340B hospitals and invested 119% more revenue in financial assets such as stocks and bonds. 

"The 340B program isn't working as intended for Illinois families," said Grabert, a health policy researcher at Marquette University and former senior House Ways and Means Committee aide. "Too many hospitals are using the program to boost revenues instead of reinvesting those dollars to expand access to care for low-income and uninsured patients." 

The 340B Drug Pricing Program allows safety-net hospitals to buy deeply discounted drugs and bill insurers at higher prices. The program was designed so that hospitals would reinvest the resulting profits in care for underserved communities. 

Grabert's analysis suggests that many Illinois hospitals are instead using the program as a profit center. The research draws on publicly available data on Illinois hospitals' revenue growth, financial investments, charity care, and workforce spending.  

Among the study's key findings: 

• Hospitals use 340B as a profit engine. 

  • Illinois 340B hospitals reported average patient revenue of $497 million, compared with $351 million for non-340B hospitals. 

• 340B profits flow into Wall Street investments. 

  • Illinois 340B hospitals invested an average of $68.3 million, compared with $24.4 million at non-340B hospitals. 

• Charity care does not increase proportionally. 

  • Despite higher revenues, Illinois 340B hospitals dedicated just 3.79% of net patient revenue to charity care. 

• Frontline caregivers see little benefit. 

  • Illinois 340B hospitals relied on 33% more contract workers, including agency nurses, than non-340B hospitals. 

  • Contract workers were paid more than double the hourly rate of full-time employees, on average. 

The findings come as Illinois lawmakers consider legislation that would give hospitals greater leeway to profit off the 340B program. 

"Before expanding 340B, policymakers should take a hard look at how hospitals are using the funds it delivers today," Grabert said. "If the goal is to help vulnerable patients afford care and medicine, the program needs stronger accountability." 

"It's concerning to see hospitals generating enormous profits from a program meant to help vulnerable patients," said Dr. Mike Kapsa, a member of the board of directors of Community Action for Responsible Hospitals, the nonprofit coalition that sponsored the research. "Illinois families deserve transparency to ensure that 340B resources actually improve access to care." 

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To read a fact sheet summarizing the analysis, visit HERE. To read Dr. Grabert's research, visit HERE.