America’s safety-net hospitals stand between vulnerable communities and the abyss. For students at historically Black colleges and universities and predominantly Black institutions, these hospitals and their community pharmacy partners are often the difference between getting care and going without.
The 340B Drug Pricing Program — created to help qualified hospitals stretch scarce resources to “reach more eligible patients and provide more comprehensive services” — is one of the most effective tools these hospitals have to do exactly that. We cannot weaken it now. Three current policy shifts would do real harm if they move forward: proposals to sharply restrict contract pharmacies; converting 340B from an upfront discount to a back-end rebate; and provisions in H.R. 1 that would push Medicaid-eligible students off coverage and strain safety-net providers.
Contract pharmacies are not a luxury; they are the last mile of access.
Many HBCU and PBI students live off campus, work irregular hours and lack cars. Contract pharmacies — community pharmacies operating under agreements with 340B-eligible hospitals — bring affordable medications within reach. Restricting them to one per 40 miles may sound tidy on paper, but it forces students to travel farther, pay more or delay care. Congress should preserve flexible networks that meet students where they live, study and work.
Don’t swap a working discount for drugmakers’ rebate scheme.
Another proposal would convert 340B’s upfront discount into a rebate paid months later. Instead of purchasing these drugs at 340B discounted prices, hospitals would be required to pay full price and submit rebate claims data to drugmakers to receive rebates — essentially floating the upfront higher cost of medications pending payment. A recent survey found that if applied to all drugs, such a model would force disproportionate share hospitals to front an average of $72.2 million annually, costs that could create cash flow challenges. Converting 340B discounts into delayed rebates would starve hospitals of funds they need right now to fund clinics, behavioral health, transportation and covering low-income patients — including college students.
H.R. 1 would hit Medicaid-eligible students and the hospitals that serve them.
The House’s H.R. 1 (“One Big Beautiful Bill Act”) includes Medicaid provisions that independent analysts project will increase churn and reduce coverage. For low-income, first-generation HBCU and PBI students, this means more uninsured visits and more pressure on safety-net hospitals.
What Congress and regulators should do now:
- Protect broad, community-based contract pharmacy partnerships where students actually live and fill prescriptions, not just inside an arbitrary radius. Students’ lives are mobile; their access points must be too.
- Preserve the upfront discount as 340B’s core. Limit rebate pilots to voluntary tests with strict safeguards and penalties for late payments.
- Reject H.R. 1’s Medicaid provisions that increase churn and uninsured care. Tie federal policy to continuity of coverage for students, not to paperwork that predictably produces hospital losses.
This is about educational attainment as much as it is about health.
When students lose coverage or access to affordable medicines, they skip medications, miss class and drop out at higher rates. Every unnecessary barrier to care is a barrier to graduation. Strong 340B and stable Medicaid are equity strategies: they keep students healthy enough to finish what they started and contribute as professionals, innovators and civic leaders.
NAFEO’s mission is to expand opportunity. HBCUs and PBIs fuel social mobility, producing disproportionate shares of Black engineers, teachers, nurses and scientists. Safety-net hospitals and their contract pharmacy partners are essential teammates. Congress must protect contract pharmacy partnerships, preserve 340B discounts and fix Medicaid provisions so students can thrive.
Baskerville is president and CEO of the National Association for Equal Opportunity in Higher Education.