Project description:BackgroundThe 340B Drug Pricing Program entitles qualifying hospitals to discounts on outpatient drugs, increasing the profitability of drug administration. By tying the program eligibility of hospitals to their Disproportionate Share Hospital (DSH) adjustment percentage, which reflects the proportion of hospitalized patients who are low-income, the program is intended to expand resources for underserved populations but provides no direct incentives for hospitals to use financial gains to enhance care for low-income patients.MethodsWe used Medicare claims and a regression-discontinuity design, taking advantage of the threshold for program eligibility among general acute care hospitals (DSH percentage, >11.75%), to isolate the effects of the program on hospital-physician consolidation (i.e., acquisition of physician practices or employment of physicians by hospitals) and on the outpatient administration of parenteral drugs by hospital-owned facilities in three specialties in which parenteral drugs are frequently used. For low-income patients, we also assessed the effects of the program on the provision of care by hospitals and on mortality.ResultsHospital eligibility for the 340B Program was associated with 2.3 more hematologist-oncologists practicing in facilities owned by the hospital, or 230% more hematologist-oncologists than expected in the absence of the program (P=0.02), and with 0.9 (or 900%) more ophthalmologists per hospital (P=0.08) and 0.1 (or 33%) more rheumatologists per hospital (P=0.84). Program eligibility was associated with significantly higher numbers of parenteral drug claims billed by hospitals for Medicare patients in hematology-oncology (90% higher, P=0.001) and ophthalmology (177% higher, P=0.03) but not rheumatology (77% higher, P=0.12). Program eligibility was associated with lower proportions of low-income patients in hematology-oncology and ophthalmology and with no significant differences in hospital provision of safety-net or inpatient care for low-income groups or in mortality among low-income residents of the hospitals' local service areas.ConclusionsThe 340B Program has been associated with hospital-physician consolidation in hematology-oncology and with more hospital-based administration of parenteral drugs in hematology-oncology and ophthalmology. Financial gains for hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients. (Funded by the Agency for Healthcare Research and Quality and others.).

Project description:ImportanceThe 340B Drug Pricing Program requires manufacturers to offer discounted drug prices to support safety net hospitals and clinics (covered entities) providing care to low-income populations. Amid expansion, the program has received criticism and calls for reform.ObjectiveTo assess the literature on the foundations of and outcomes associated with the 340B program.Evidence reviewThe databases searched in this scoping review included PubMed, Embase, EconLit, National Bureau of Economic Research (NBER), Westlaw, the Department of Health and Human Services Office of the Inspector General (HHS-OIG) website, the Government Accountability Office (GAO) website, and Google in February 2023 for peer-reviewed literature, legal publications, opinion pieces, and government agency and committee reports related to the 340B program.FindingsAmong a collected 900 documents, 289 met inclusion criteria: 83 articles from PubMed, 12 articles from Embase, 2 articles from EconLit, 1 article from NBER, 28 articles from Westlaw, 23 legislative history documents, 103 documents from Google, 11 GAO reports, and 26 HHS-OIG reports. Included literature pertained to 4 stakeholders in the 340B program: covered entities, pharmacies, pharmaceutical manufacturers, and patients. This literature showed that hospitals, clinics, and pharmacies generated revenue and manufacturers have forgone revenue from 340B discounted drugs. Audits of covered entities found low rates of compliance with 340B program requirements, whereas mixed evidence was uncovered on how covered entities used their 340B revenue, with some studies suggesting use to expand health care services for low-income populations and others to acquire physician practices and open sites in higher-income neighborhoods. These studies were hampered by a lack of transparency and reporting on the use of 340B revenue. Studies revealed patient benefits from access to expanded health care services, but there was mixed evidence on patient cost savings. Although the review identified considerable research on 340B hospitals, pharmacies, and patients, less research was found evaluating the 340B program's effect on nonhospital covered entities, drug pricing, and racial and ethnic minority groups.Conclusions and relevanceIn this scoping review of the 340B program, we found that the 340B program was associated with financial benefits for hospitals, clinics, and pharmacies; improved access to health care services for patients; and substantial costs to manufacturers. Increased transparency regarding the use of 340B program revenue and strengthened rulemaking and enforcement authority for the Health Resources and Services Administration would support compliance and help ensure the 340B program achieves its intended purposes.

Project description:ObjectiveTo characterize price trends and variation for US generic and branded drugs at the retail level as they relate to pharmacy acquisition costs and local market factors.Data sourcesDrug pricing data consisting of US pharmacy claims from 2014 to 2019 collected and licensed by GoodRx, an online tool for comparing drug prices.Study designTime trends of median drug prices and coefficients of variation were measured for generic and branded drugs, including subgroups based on clinical condition (i.e., diabetes and cancer). Pharmacy competition was measured using the Herfindahl-Hirschman Index (HHI) at the zip-code level. Multivariable linear regression analysis assessed the impact of local market-level factors on drug prices and variation.Data collectionUS drug pricing data consisting of claims filled through a mix of public and private insurance at 58,332 chain and independent pharmacies across 14,421 zip codes in all 50 states.Principal findingsFrom 2014 to 2019, pharmacy retail markets trended towards greater competition: average HHI by zip code decreased by 15.0% (p < 0.001). Median cash price increased significantly for both generic (6.58%, p < 0.001) and branded (84.10%, p < 0.001) drugs. When normalized to acquisition costs, cash prices for generic drugs rose 22.03% (p < 0.001) while those of branded drugs decreased by 2.31% (p < 0.001). Diabetes drugs showed higher baseline overall markup of cash prices relative to acquisition costs (10.54, Interquartile range (IQR) 3.28-18.43) than cancer drugs (1.88, IQR 1.36-3.08). Neither local pharmacy competition nor median income significantly predicted drug price or variation.ConclusionMeasures of generic drug price and price variation are high despite decreased costs earlier in the pharmaceutical supply chain, defying expectations of what would happen in a competitive market. Efforts to bypass the pharmacy benefit model for generic drugs may offer consumers an opportunity for substantial savings.

Project description:BackgroundThe 340B Drug Pricing Program has been controversial since its inception in 1992, a major criticism being that 340B hospitals use more outpatient drugs, and more expensive drugs, because of financial incentives to "make money" through the program. The goal of this study was to determine whether characteristics of patients treated at 340B hospitals, and affiliation of hospitals with NCI-designated cancer centers, would explain higher Part B drug costs and use of more expensive chemotherapy drugs.MethodsThis is an observational study using data from SEER-Medicare and 340B entity database. Fee-for-service Medicare beneficiaries who were first diagnosed with cancer between 1/1/2013 and 12/31/2015 were included. Hospital, patient, and cancer/clinical characteristics were used as predictors of both overall Part B drug costs and use of expensive chemotherapy drugs. Patient characteristics and cancer conditions were compared between those who were treated at 340B and non-340B hospitals, and between those who used and who did not use any expensive chemotherapy treatment. Independent relationships between overall Part B drug costs and patients' 340B status, and between patients' use of expensive chemotherapy drug and patients' 340B status were evaluated in multivariate analyses, using a "stepwise" generalized estimating equation modeling approach.ResultsWe found that patients at 340B hospitals had a somewhat higher chance of using one of the ten expensive chemotherapy drugs, and somewhat higher overall drug costs, but these relationships became non-significant when patient, cancer/clinical factors, and cancer center status were considered. Compared to the reference patients, patients who were treated in an NCI-designated cancer center or a hospital affiliated with such center, who had certain types of cancers (e.g., B-cell), or had advanced-stage disease had a higher chance to use expensive chemotherapy treatment; patients who were older, survived the first 12 months upon diagnosis, had advanced-stage disease, or had more drug claims had higher drug costs.ConclusionsHospital 340B status was not significantly associated with use of more expensive cancer drugs or drug costs once other relevant factors (e.g., cancer center status, advanced-stage disease) were taken into account.

Project description:ImportanceThe federal 340B program lowers the acquisition cost of prescription drugs and places no limits on what hospitals charge payers. Congress established the program to allow 340B profits (the difference between payments and acquisition costs) to subsidize other safety-net services. Little is known about the magnitude of revenues and profits from the 340B program among participating hospitals.ObjectiveTo report revenues and estimated profits from the 340B program that hospitals collect from Medicare and Medicare beneficiaries for outpatient clinic administration of prescription drugs covered under Medicare Part B.Design, setting, and participantsThis cross-sectional descriptive study used 100% Medicare outpatient Part B claims from January 1, 2013, to December 31, 2016, from fee-for-service Medicare beneficiaries administered separately payable drugs at general acute care nonprofit or public hospitals without special payment designations. Claims data (N = 11 298 860) were aggregated to the hospital-year level (N = 6000) and linked to hospital finances and 340B participation from Medicare cost reports and the 340B covered entity list.Main outcomes and measuresOutcomes studied were revenue and estimated profits, assuming a 50% discount from 340B-discounted drug administrations to Medicare patients, as well as Medicare 340B profits relative to hospital net operating revenue, uncompensated care, and disproportionate share hospital payments.ResultsDuring the study period, hospitals received approximately $2.1 billion in 340B revenue from Medicare in 2013, increasing to $3.7 billion in 2016. Estimated 340B profits from Medicare in 2016 totaled $1.9 billion, and per-hospital estimated 340B profits were $2.5 million but exhibited variability (median, $0.8 million; interquartile range, $0.1 million-$2.8 million). In 2016, median estimated 340B profits from Medicare were 0.3% (interquartile range, 0.1%-0.7%; mean, 0.4%) of hospital operating budgets and 9.4% (interquartile range, 1.8%-26.5%; mean, 16.6%) of hospital uncompensated care costs.Conclusions and relevanceEstimated profits that hospitals derived from administering 340B-discounted drugs to Medicare patients are small compared with operating budgets yet substantial compared with uncompensated care costs for many hospitals. Revenue and profit estimates from 340B-discounted drugs represent a lower bound because data on revenue from the sale of outpatient retail dispensed drugs by hospital contract pharmacies and commercial insurer claims are not available.

Project description:PurposeTo report historical patterns of pharmaceutical expenditures, to identify factors that may influence future spending, and to predict growth in drug spending in 2022 in the United States, with a focus on the nonfederal hospital and clinic sectors.MethodsHistorical patterns were assessed by examining data on drug purchases from manufacturers using the IQVIA National Sales Perspectives database. Factors that may influence drug spending in hospitals and clinics in 2022 were reviewed-including new drug approvals, patent expirations, and potential new policies or legislation. Focused analyses were conducted for biosimilars, cancer drugs, generics, COVID-19 pandemic influence, and specialty drugs. For nonfederal hospitals, clinics, and overall (all sectors), estimates of growth of pharmaceutical expenditures in 2022 were based on a combination of quantitative analyses and expert opinion.ResultsIn 2021, overall pharmaceutical expenditures in the US grew 7.7% compared to 2020, for a total of $576.9 billion. Utilization (a 4.8% increase), price (a 1.9% increase) and new drugs (a 1.1% increase) drove this increase. Adalimumab was the top drug in terms of overall expenditures in 2021, followed by apixaban and dulaglutide. Drug expenditures were $39.6 billion (a 8.4% increase) and $105.0 billion (a 7.7% increase) in nonfederal hospitals and in clinics, respectively. In clinics and hospitals, new products and increased utilization growth drove growth, with decreasing prices for both sectors acting as an expense restraint. Several new drugs that are likely to influence spending are expected to be approved in 2022. Specialty and cancer drugs will continue to drive expenditures along with the evolution of the COVID-19 pandemic.ConclusionFor 2022, we expect overall prescription drug spending to rise by 4.0% to 6.0%, whereas in clinics and hospitals we anticipate increases of 7.0% to 9.0% and 3.0% to 5.0%, respectively, compared to 2021. These national estimates of future pharmaceutical expenditure growth may not be representative of any particular health system because of the myriad of local factors that influence actual spending.

Dataset Information

Trends in 340B Drug Pricing Program Contract Growth Among Retail Pharmacies From 2009 to 2022.

Publications

Trends in 340B Drug Pricing Program Contract Growth Among Retail Pharmacies From 2009 to 2022.

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