The findings come as lawmakers consider major reforms to the contentious drug discount program.

Created by Congress in 1992, the 340B program allows safety-net providers that care for a large number of low-income and uninsured patients to purchase a slew of outpatient drugs at a discount from drugmakers. The discounts can be steep, between 25% and 50% on drug purchases, and providers retain the savings.

Although 340B hospitals are not legally required to invest the savings into charity care, the program has come under fire from critics who say hospitals use the savings to pad profits.

Those criticisms have intensified in recent years as spending in the program balloons and lawmakers on both sides of the aisle increasingly scrutinize 340B. Hospitals and outpatient facilities purchased $100 billion worth of 340B drugs last year, a nearly 23% increase from the year prior.

The latest research from the Pioneer Institute and CancerCare, a nonprofit that provides free support and services to cancer patients, joins a growing list of studies scrutinizing how 340B hospitals spend money.

There’s an implicit expectation that 340B hospitals will use the money saved on drugs to help vulnerable patients, the report says.

But 340B hospitals are providing less charity care than their non-340B counterparts.

In addition to spending less on charity care overall, Pioneer said 340B hospitals spend less on charity care for uninsured patients: Spending represented 1.6% of operating expenses at 340B hospitals, versus 2.26% at non-340B hospitals, according to the report.

“The 340B program is intended to strengthen the healthcare safety net,” the report stated.

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