340B Expansion: Bad for patients, healthcare funds and unions

By Gregory Floyd | June 2, 2025

Medical advocacy groups who help the minority community say the program doesn’t work.

Doctors say the program doesn’t work.

Patient advocates say the program doesn’t work.

Business groups say the program doesn’t work.

Pastors from across the state say the program doesn’t work.

On behalf of over 24,000 Teamsters Local 237, we are now raising a red flag about the federal 340B program and strongly opposing S.1913/A.6222.

It’s a bill that would wrongly give the program more power in New York. The federal 340B drug program was started by Congress in 1992 and was supposed to help safety net providers and people in need afford healthcare and medicines. Instead, it’s ballooned into a program which lets participating hospitals charge patients whatever they want for deeply discounted outpatient drugs and keep the profits.

This practice has been widely reported by the New York Times and Wall Street Journal.
A New York Times investigation uncovered that hospitals chains are buying community hospitals in underserved areas just to reap the financial rewards of the 340B program- not to help the community. In fact, the North Carolina’s Treasurer found that hospitals participating in the 340B program were marking up cancer drugs for teachers by up to 5.4 times what they paid for the medicines.

We believe this is happening here in New York to our members insured by the Teamsters Local 237 Health and Welfare Benefit Fund. Teamsters Local 237 members are public employees working in New York City and on Long Island for municipal agencies at locations including NYCHA, public schools, hospitals, homeless shelters, and CUNY. Local 237 is proudly the largest Local in the International Brotherhood of Teamsters and
the above-referenced bill is a triple threat to hard-working public employees.

This bill does nothing to fix issues with the federal program, it just makes the cash grab by big hospital systems, contract pharmacy networks, and third-party administrators easier.
In fact, it attempts to place into law the most troubling aspects of the program.

Local 237 members have no way of knowing if they could be patients of a provider participating in this federal program. The Local 237-provided health insurance is likely even being charged a marked-up price for a medicine the provider could be getting at a huge discount.

This bill does not help make medicine more affordable for Local 237 members…it actually does the opposite!

A study concluded that employers in New York are losing an estimated $445 million in negotiated drug rebates because of 340B growth.

We oppose the above referenced bill.

While 340B is an important program and should help vulnerable people get access to healthcare and drugs it needs to happen in a transparent way.

The Legislature shouldn’t pass a bill which will hurt hard working union members’ pockets.

This bill is:

Bad for our members.

Bad for our healthcare funds.

Bad for the union – forcing us to pay more and triggering givebacks and lower wages.

It should not become a law.