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A 25-year-old federal drug discount program has grown so big and controversial that it faces a fight for survival as federal officials and lawmakers furiously debate the program鈥檚 reach.

The program, known as 340B, requires pharmaceutical companies to give steep discounts to hospitals and clinics that serve high volumes of low-income patients.

The Centers for Medicare & Medicaid Services struck a blow to the program this month announcing a to cut Medicare payments for hospitals enrolled in the program by 28 percent, or about $1.6 billion. The American Hospital Association, the Association of American Medical Colleges, America鈥檚 Essential Hospitals and others on Nov. 13, arguing that the agency lacks the authority to slash the payments and that the rule undermines the intent Congress had when creating the program.

Several federal reports in recent years from the Medicare advisory board, as well as the聽聽and the聽, have evaluated 340B鈥檚 explosive growth. About 40 percent of the hospitals in the U.S. now buy drugs through the program, according to the 2015 GAO report.

Richard Sorian, of the hospital lobbying group 340B Health, said that for some small, rural hospitals the funding cut 鈥渃ould actually be the difference between staying open and closing.鈥�

Northeast Ohio鈥檚 largest safety-net hospital, MetroHealth System in Cleveland, said it would see an $8 million cut in Medicare reimbursements.

In trying to explain the importance of that funding, Dr. Benjamin Li, a MetroHealth cancer surgeon, said that if the 340B program were to disappear 鈥渟ome of our cancer patients will not be able to have lifesaving care.鈥�

In contrast, those supporting the cut, including drugmakers, argue that the program has grown beyond its original intent because hospitals have pocketed the discounts to pad profits 鈥� not to help indigent patients.

Stephen Ubl, president of the drug industry group PhRMA, said the program 鈥渘eeds fundamental reform鈥� and that the latest rule change is merely a good first step. His group, which has and an advertising campaign geared at pinpointing the program鈥檚 flaws, has a list of changes that Congress and the Trump administration could tackle. Those include limiting which hospitals should be eligible for 340B price breaks and making sure needy patients benefit when hospitals buy discounted drugs.

The day after the hospital groups filed suit, Joe Grogan, director of health programs at the White House鈥檚 Office of Management and Budget, called 340B 鈥渞eally screwed up,鈥� according to Politico, and said the Trump administration isn鈥檛 afraid to take on the program. 鈥淲e are not wimps.鈥� Grogan led a White House task force last summer that proposed scaling back the program.

The hospitals 鈥� often the biggest employers in a congressional district 鈥� are ready for a fight. The American Hospital Association launched an campaign. And hundreds of members of Congress signed a defending the program. On Nov. 14, two House lawmakers introduced that would prevent CMS from implementing the proposed rule.

Under 340B, named after the section of the Public Health Service Act that authorizes it, eligible hospitals buy drugs at a discount from the pharmaceutical companies and then are reimbursed for those purchases from Medicare. The drugs are purchased under the Part B program, which covers expensive chemotherapy and other treatments in a hospital, doctor鈥檚 office and clinics.

The hospitals make money on the spread, using it to improve the financial stability of the hospital.

In comment letters to federal officials, a range of hospitals from St. Cloud, Minn., to Kalamazoo, Mich., said the new rule would cost them hundreds of thousands of dollars.

Yet, even as concerns arise around the impact of the cuts and a legal battle plays out, Congress has heightened scrutiny of the program. The House Energy and Commerce Committee held over the past few months, examining how hospitals use money made on 340B drugs. A key question for lawmakers was how much the patients benefited.

The new rule, according to CMS Administrator Seema Verma, addressed that concern 鈥� albeit indirectly.

While the actual price of drugs will not be lower under the rule, Verma said beneficiaries will save an estimated $320 million a year on copayments. Medicare patients typically are responsible for a percentage of coinsurance on their prescriptions. The lowered Medicare reimbursement means that an enrollee鈥檚 coinsurance would be lower at 340B hospitals because Medicare would pay hospitals less for the drug.

In one example the administration provided, if Medicare reimburses a participating hospital $2,000 a month for an individual drug, a beneficiary would save over $100 on their out-of-pocket share.

Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York, agreed.

鈥淚f Medicare reduces the reimbursement amount, that will directly reduce what the patients pay,鈥� Bach said. 鈥淧atients will see lower prices.鈥�

Allan Coukell, senior director for health programs at the Pew Charitable Trusts, said the change in how Medicare spends its money may have broader, unintended consequences for the health care system. Patients may change providers, seeking lower copays. Or, conversely, hospitals may drop out of the program because of lower reimbursements.

鈥淭he long-term impact of such a shift is unknown,鈥� Coukell said, adding that one thing is certain: Fewer hospitals participating in the program simply 鈥渢ransfers the 340B revenue from the provider to the manufacturer.鈥�

The 340B program wasn鈥檛 always so controversial. The bill, signed by Republican President George H.W. Bush in 1992, once had bipartisan support.

鈥淓veryone loved the program. That鈥檚 why Congress expanded it on three separate occasions,鈥� recalled William von Oehsen, who helped lobby for the initial law and is a founder of the hospital group 340BHealth. Most recently, the program was expanded under the Affordable Care Act in 2010.

鈥淭here was never any concern about its size until, basically, pharma decided it had gotten too big and started investing in a public relations and lobbying campaign to reform it,鈥� von Oehsen said, adding, 鈥淲e just don鈥檛 have the money they have, and it鈥檚 kind of discouraging.鈥�

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