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Minnesota health officials present second-year 340B report, find roughly $1.034 billion in statewide net revenues in 2024
Summary
A Minnesota Department of Health briefing to the Senate Health Committee says 204 covered entities generated approximately $1.034 billion in net 340B revenue in 2024, concentrated in hospitals and driven by high-cost specialty drugs; MDH offered no formal recommendations but said it will refine data collection.
The Minnesota Department of Health told the Senate Health and Human Services Finance and Policy Committee on March 5 that its second-year analysis of the federal 340B drug discount program shows large, concentrated revenue flows for covered entities in 2024. State Health Economist Stephen, director of the Health Economics Program, said the department calculated statewide net 340B revenues at about $1.034 billion for 2024 and described the program as large but opaque.
"There were 204 covered entities in the state in 2024," Stephen said. "They collectively spent about $1.5 billion on 340B drugs, incurred roughly $165 million in program operating costs, and were reimbursed about $3 billion — yielding statewide net revenues of about $1.034 billion." He added that roughly half of pharmacy contracts associated with covered entities are with out-of-state pharmacies, expanding the program's reach beyond Minnesota's borders.
MDH pharmaceutical analysis manager Lisa Steber told the committee 340B participation includes hospitals and affiliated off-site outpatient clinics, and that outpatient and office-administered drugs (such as infused biologics) were more completely reported in the second year, which helps explain much of the revenue increase from year one.
The department highlighted several concentrated patterns: general acute care hospitals accounted for roughly 80% of statewide net 340B revenue, and 25 providers produced about 90% of the state's net revenue. MDH also said specialty, high-cost drugs represent a disproportionate share of dollars spent and of net revenue, even though they account for a smaller share of units purchased.
Stephen framed the findings as data-driven context rather than policy prescriptions. "We don't have a set of recommendations," he told lawmakers, noting the study focused on transaction prices and reimbursements and left downstream questions, such as whether 340B-created financial incentives affect prescribing or drive consolidation, for future work.
Committee members asked how policymakers could use the updated data. MDH answered that it can refine collection methods in coming years to give legislators more complete drug-level and payer-mix information but stopped short of endorsing specific legislative fixes.
The briefing underscored policy trade-offs: the 340B program provides safety-net support to providers, sometimes reducing losses when drugs are dispensed free to patients, yet the program's financial dynamics also create opportunities for intermediaries and revenue-generation incentives that merit closer study.
The committee ended the hearing segment without taking a formal vote on MDH's materials; MDH staff said they would continue improving data collection and remain available to brief legislators further.
