340B hospital program leads to higher costs, PhRMA says
- The 340B Drug Pricing Program costs patients more in the long run by moving care to hospital outpatient settings rather than physicians' offices, according to a recent analysis commissioned by the drug lobby Pharmaceutical Research and Manufacturers of America, better known as PhRMA.
- The research conducted by the Berkeley Research Group is the latest skirmish in a battle over the program, which the American Hospital Association, America's Essential Hospitals and the Association of American Medical Colleges argue help safety net hospitals access affordable prescription drugs.
- The report looked at Medicare Part B reimbursements for physician-administered medicine and found that 30% of payments were at 340B hospitals in 2017, a sizable jump from less than 10% in 2008. Reimbursements at 340B hospitals increased for breast cancer, rheumatoid arthritis and multiple myeloma treatments.
The 340B program aims to help underserved communities get prescription drugs in safety net facilities. More hospitals have joined the program in recent years. In 2017, covered entities purchased more than $19 billion in drugs, a 114% increase since 2014.
With that growth has come controversy, including regulatory and legal fights.
Research has shown that drug spend at 340B hospitals is about one-third higher than at non-340B facilities. A New England Journal of Medicine report found the 340B project "drives hospital/physician consolidation while not expanding care to low-income populations or improving their mortality rates."
Critics like PhRMA and some lawmakers charge that the federal government doesn't provide enough oversight or know how much hospitals are benefiting from the program. The lobbying group has criticized Health and Human Services 340B reform efforts, which it says puts too much burden and risk on drug manufacturers.
The Trump administration has attempted to cut 340B payments by 30%. However, a federal judge rejected those reductions in December. AHA, AEH and other groups that filed the lawsuit alleged the government "exceeded its statutory authority" by trying to cut the payments.
The 340B program changed Jan. 1 to allow participating facilities access to 340B drug manufacturers' prices and to impose financial penalties for overchargers.
Earlier this month, HHS launched a website with prescription drug ceiling prices for the program. The Office of Pharmacy Affairs 340B Information System allows facilities to register and manage their participation in the program and now lets hospitals check drug prices and verify their accuracy. HRSA could fine drug manufacturers if they overcharge 340B facilities.
- Berkeley Research Group Site of Shift for Physician-Administered Drug Therapies: Update