President Trump Cracks Down on 340B Medicare Fraud

The following content is sponsored by Americans for Limited Government. A government safety-net program for low-income patients was never intended to be a slush fund for hospital systems, corporate middlemen, and taxpayer-backed luxuries. Now that fraud and waste are piling up in plain sight, Washington has no excuse left to look the other way. Entities participating in the 340B Drug Pricing Program have recently been exposed for engaging in mass fraud involving overbilling and kickbacks. One recent case makes clear just how brazen this abuse can get. Jean Jethro Alexandre, a Haitian foreign national, used the 340B program to defraud Medicare, Medicaid, and private insurance of more than $58 million, then used the money to fund a life of luxury, including several high-end vehicles, a mansion near Miami, and other properties. Alexandre recruited fake patients, paid them kickbacks to accept fraudulent prescriptions, and then pocketed the reimbursements himself. In March, Breitbart reported that Ilhan Omar’s sister, Sahra Noor, ran a 340B clinic, the People’s Center Clinics & Services. Omar boasted about securing $2.2 million for the clinic. Recent reports indicate that the raid on Omar’s home was triggered by a text message on her sister’s phone. These are just two examples of 340B participants getting the attention of law enforcement. Waste, fraud, and abuse by 340B entities have become a trend in recent headlines. New York-Presbyterian/Brooklyn Methodist Hospital agreed to pay $17.3 million to resolve allegations that it paid unlawful kickbacks to physicians at a chemotherapy infusion center, while Virginia Commonwealth University’s (VCU) Health System Authority agreed to pay nearly $4 million after audits found federal health care payors had been overbilled for radiation oncology services. These cases lay out the larger problem. 340B hospitals and health systems are exploiting federal health care programs while patients and taxpayers pick up the tab. The program wasn’t built for this. Congress created 340B to help nonprofit hospitals serve low-income patients by allowing them to buy prescription medicines at steep discounts. In theory, that’s a sound idea. In practice, hospitals aren’t required to pass the savings on, so they can instead charge patients and employer-sponsored insurance enormous markups, turning a safety-net program into a profit engine. That profit engine is now funding a level of extravagance far removed from patient care. VCU’s Arts in Healthcare exhibit is valued at over $5,000,000. For a hospital system benefiting from a program meant to help low-income patients access affordable medicine, such spending raises obvious questions. Every dollar tied up in luxury branding is a dollar not going toward lowering costs for the people 340B was intended to serve. VCU is hardly alone. Petersburg Medical Center has solicited artwork for its new Wellness, Education and Resource Center, NYU Langone promotes a formal art program across its renovated campus, and Mayo Clinic has a partnership with a wellness and spa center. These are massive expenses that could be spent on patient care, but instead are burned on a life of luxury. The 340B windfall isn’t just funding brand upgrades, high-end art, and spa properties; large corporations are casually treating it like a revenue stream. Take major health insurer Cigna, whose CEO on a recent earnings call described the company not as a direct 340B participant, but as a “service partner” to hospitals managing their 340B activity. Nextplat, a publicly traded healthcare e-commerce platform, reported in its SEC filings that pharmacy 340B contract revenue decreased approximately $6.4 million from 2024 to 2025, “due to certain relationships transitioning to other pharmacy partners, some covered entities opened in-house pharmacies, and another covered entity no longer participates in the 340B program.” The Trump administration and Vice President JD Vance have been vocal about cracking down on fraud and wasteful spending. Recently, 445 defendants who abused government healthcare programs were charged with $6.5 billion in alleged fraud. Regulators should build on that momentum and turn their attention to 340B next. Fortunately, the Trump administration is piloting a new program that would replace automatic upfront 340B discounts with a rebate model for a limited number of drugs, bringing more transparency and accountability into the process. This is a welcome step forward. Congress and the administration should work together to support the reformed 340B pilot program. Taxpayer dollars must be directed toward ensuring patients get access to quality, affordable care, not unnecessary extravagance.