By ADAM COHEN
The debate over the 340B Drug Pricing Program is complicated. However, beyond the arguments over rebates, contract pharmacies, and program intent sits a simpler reality that every stakeholder should plan around. Whatever form 340B takes next, the value an organization captures will depend on its ability to document and justify every discounted transaction with detailed, defensible data. Most organizations are not yet equipped to do that.
The stakes are rising, and so is the burden of proof
Covered entities purchased roughly $100 billion in outpatient drugs through 340B in 2025, according to the Health Resources and Services Administration (HRSA), nearly double the 2022 total. Hospitals and clinics use those savings to fund uncompensated care, rural access, and services for underserved patients. Manufacturers argue the program has outgrown its original intent and point to the duplicate discounts and diversion that HRSA audits have identified. Contract pharmacies are caught between manufacturer restrictions, state protections, and the litigation that followed.
HRSA’s revised rebate pilot, scheduled to begin in January 2027, establishes that instead of receiving the discount at the point of purchase, participating providers will pay more upfront, submit claims data, and receive the 340B price afterward. Providers are right to worry about cash flow and administrative load resulting from this shift. However, the more lasting change is where the burden now sits. Providers must prove eligibility, transaction by transaction, before they are made whole.
Whether the rebate model expands, stalls in court, or gives way to something else, the trajectory is the same. Organizations will be expected to show, with increasing precision, why a transaction qualifies and what evidence supports that conclusion.
The data exists. Just not in one place.
It all sounds manageable until you try it. Substantiating a single 340B transaction may require pharmacy claims, medical claims, patient and encounter records, payer information, and wholesaler and purchasing data, as well as contract-pharmacy records. Some of it is structured and lives in reports, exports, invoices, and other documents. Other pieces of information are controlled by third parties. And, as anyone with experience in healthcare data knows, the same data element may look radically different depending on which system produced it.
The American Hospital Association made exactly this point in its comments on the rebate proposal, noting that required pharmacy and medical claims information often resides in separate systems, with other necessary information coming from still other internal and external sources. All this must be extracted, reconciled, and validated before it can be submitted.
This ultimately is the crux of the problem. Having data somewhere in the enterprise is not the same as having usable data, and usable data is not the same as validated, transaction-level evidence that will stand up to a manufacturer dispute or audit.
Moving data and effectively using it are not the same
For years, the data conversation in healthcare has centered on interoperability. 340B exposes a significantly harder problem. Organizations must take in information from many sources, in multiple formats, and turn it into a consistent, auditable account of what actually happened. That means extracting the relevant facts, normalizing them, reconciling them across pharmacy, clinical, financial and purchasing systems, applying compliance rules, flagging what is missing or conflicting, and preserving a clear trail back to the source.
Automation is essential at this volume. However, “mostly right” is not good enough when the output determines whether a discount is received or an audit is survived. The goal is not to remove people from the process. It is to let the vast majority of transactions flow through reliably, so that human expertise is spent on the exceptions that genuinely require judgment. And because much of the evidence sits with wholesalers, pharmacies, and payers, this capability has to work across an organization’s partner ecosystem, not just inside its own walls.
The readiness test
The most important question for healthcare executives is not whether they support or oppose a particular reform. It is whether their organization could meet a more data-intensive standard tomorrow. Can you identify every system that holds the information needed to substantiate a 340B transaction? Can you pull it together without armies of analysts and spreadsheets, reconcile conflicting records, and trace any submitted data element back to its source? Can you catch exceptions before they become lost discounts or audit findings? And can you do all of this at scale?
Organizations that cannot answer yes have a data-readiness problem, regardless of how the 340B policy debate ends. The mistake would be to treat it as a temporary compliance exercise, adding another spreadsheet, another manual workflow, or another hire every time the rules change. The better path is to build a durable data layer between fragmented source systems and outcomes the organization must be able to prove.
Proof is becoming the price of participation
That capability will not matter only for 340B. Reimbursement, prior authorization, quality reporting, and value-based arrangements are all moving toward a world in which organizations must prove outcomes using information assembled from disparate systems. 340B is simply the clearest, highest-dollar example today. Stakeholders will keep debating how the program should evolve, and healthcare leaders do not need to wait for that debate to end before taking action. The organizations that protect their 340B savings, and the patients those savings support, will be the ones that start turning fragmented information into defensible data now, while the debate is still ongoing.
Adam Cohen is co-founder of Morph Services.
