Consequences of the 340B drug pricing program

Researchers at Harvard Medical School examined whether the 340B Drug Pricing Program, which discounts medications 20%–50% for qualifying hospitals, meets its goal of leveraging the savings to expand and improve care to underserved populations. Using Medicare claims and a regression-discontinuity model, they assessed whether program eligibility resulted in expanded treatment of ophthalmology, rheumatology, and hematology-oncology patients, who typically require parenteral drugs. The researchers also looked at hospital-physician consolidation—or whether 340B affiliates acquired more doctor practices or hired more physicians in these three specialities—as well as the effect of program eligibility on care and mortality among low-income patients. The data revealed that hospitals in the program experienced hospital-physician consolidation in hematology-oncology and administered more parenteral drugs in both the hematology-oncology and ophthalmology settings. However, with little followup of how they spend their 340B windfall, there is also little evidence to suggest they have used it to improve care for the populations the initiative was created to serve. There were no significant differences between eligible and non-eligible hospitals as far provision of safety-net or inpatient care for these individuals or in mortality among low-income residents of the hospitals' local service areas. Furthermore, program eligibility was linked to fewer low-income patients in hematology–oncology and ophthalmology. It is possible that qualified hospitals instead may have been encouraged to provide more parenteral drugs to patients supported by generous insurance policies. While 340B offers discounts to institutions that disproportionately treat underserved populations, the researchers suggest it offers no incentive for them to direct the savings to areas that further that missive. Moreover, they argue, it actually may stimulate provider consolidation, which has increased prices and spending without appearing to improve care. The study authors argue that a recent move by HHS to reduce drug reimbursements to 304B affiliates could curb hospital–physician consolidation without deteriorating care for low-income patients. Meanwhile, they conclude, policymakers should consider broader proposals that make payments and discounts for care delivery setting-neutral.