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340B Spotlight: New analysis finds 340B program growth continues to accelerate despite false claims

Nicole Longo
Nicole Longo July 13, 2017

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This week, Berkeley Research Group (BRG) released a new whitepaper pushing back on the highly misleading claim that 340B sales are only 2 percent of annual U.S. drug sales. Citing a number of inconsistencies in the methodology used to calculate the false claim, BRG recalculated the statistic and found that 340B drug purchases represented more than nearly four times the figure that is often referenced.

To make a more accurate calculation, the whitepaper compares total gross 340B purchases to the total gross market for which 340B purchased drugs are eligible, rather than comparing apples to oranges by looking at net to gross. It also excludes drugs purchased for use in inpatient settings since 340B drugs are specifically for outpatient use.

According to the whitepaper, the 340B program actually accounted for nearly 8 percent of total U.S. branded outpatient drug sales in 2016. The paper shows that the program has been growing faster than overall outpatient pharmaceutical sales since 2010—raising questions about the sustainability of the program. Created by Congress a quarter of a century ago, the 340B program was designed to help uninsured or otherwise vulnerable patients access prescription medicines at safety-net facilities. While many clinics that receive government grants use the program to improve access to medicine for needy patients, not all 340B hospitals are good stewards of the program. Instead, the growth of the 340B program has:

  • Prioritized profits over patients. Many hospitals have taken advantage of the discounted drugs provided through the program without ensuring patients ever receive those same benefits. Currently, almost half of all hospitals qualify for 340B discounts, due in part to outdated eligibility metrics for some hospitals that have not been updated since the program was created.

  • Expanded without an increase in oversight. 340B continues to grow with no end in sight and no regular oversight to ensure the program is working as intended. Unchecked, the expansion of the 340B program will not help vulnerable patients but will rather encourage even less transparency and accountability among 340B hospitals.

  • 340B growth has come at the expense of community oncologists and may be raising prices in some therapeutic areas. This study shows that about a third of all outpatient sales of certain types of cancer treatments are now at 340B hospitals. Some economists have suggested that this outsized impact of the program in certain therapeutic areas is raising prices for patients. Additionally, this study shows that the increasing use of these medicines at 340B hospitals is coming at the expense of treatments in physician offices.

Without modernization of the 340B program and an accurate understanding of the program’s size, 340B will not reach the vulnerable or uninsured patients it was intended to help.

Read the full BRG report here and learn more about 340B here.

Topics: 340B, Hospitals