Nevada must avoid Washington’s 340B mistake and instead demand transparency

Thirty-four years ago, Congress created Section 340B, a drug program involving pharmaceutical manufacturers allowing eligible healthcare providers to buy discounted outpatient drugs for low income and uninsured patients.

Over time, it has drifted. Today, 340B functions primarily as a significant revenue stream for large hospital systems, corporate pharmacy chains, and pharmacy benefit managers (PBMs). While originally dispensing drugs directly to patients, it now runs largely through "contract pharmacy" arrangements — lucrative partnerships where hospitals allow large, outside retail corporations to dispense the drugs for higher prices, sharing in the profits.

In 2025, 34 states saw 70 bills dealing with the 340B federal program. Recently, Washington passed Senate Bill 59812, claiming to protect access to discounted 340B medicines, but lacking accountability to ensure savings reach intended patients.

Washington’s new law mandates that manufacturers ship 340B drugs to all contract pharmacies. Since 2010, the number of contract pharmacy arrangements nationwide has exploded by more than 8,000%. These agreements allow discounted drugs to be dispensed at outside pharmacies, often in wealthier neighborhoods, where financial incentives encourage profit-taking. For-profit entities keep a staggering 72% profit margin on 340B medicines4, compared with just 22% for non-340B drugs.

Such legislation does not assure a low-income or uninsured patient at a contract pharmacy in North Las Vegas will get a lower price for the same drug than someone buying in Summerlin.

The Nevada Legislature is in its interim session, with committees holding hearings on policy issues and issuing recommended bill draft requests for potential 2027 legislation.

If Nevada wishes to examine 340B, lawmakers should look to Virginia as a model. Its Senate recently amended its own 340B mandate bill, SB 278. They rejected a forced mandate and set up a stakeholder working group to evaluate the 340B program, ensuring that they understand 340B before advancing policies that could harm patients.

Nevada must prioritize accountability before blindly codifying a system already under intense national scrutiny. Reform begins with understanding the data, like the comprehensive audit conducted by the Minnesota Department of Health that found 340B hospitals generated a 42.45% profit margin — the state's largest, accounting for approximately 80% of the statewide net 340B revenue. Meanwhile, true safety-net clinics generated the least.

Carson City policymakers must demand transparency and ensure 340B resources are targeted to communities with the greatest need. Copying Washington’s broken 340B expansion would likely increase overall costs without helping Nevada’s low-income and uninsured patients. All patients, especially the most vulnerable, deserve nothing less.

Tom McCoy is executive director of government affairs for the Nevada Chronic Care Collaborative.