The 340B drug discount program: hospitals generate profits by expanding to reach more affluent communities

Expansion of 340B Disproportionate Share Hospitals in the United States From 2010 to 2022

OBJECTIVE

To evaluate how the communities of newly registered 340B Disproportionate Share Hospitals (DSHs), child sites, and contract pharmacies have changed over time on key socioeconomic measures.

STUDY SETTING/DESIGN

Serial cross-sectional analysis from 2010 to 2022 examining yearly change in Social Deprivation Index (SDI).

DATA SOURCES/ANALYTIC SAMPLE

340B DSHs, child sites, and contract pharmacies were identified in the Office of Pharmacy Affairs and Information System and linked to socioeconomic measures by ZIP code.

FINDINGS

Seven hundred and seventy five newly registered 340B DSHs, 29,475 child sites, and 48,214 contract pharmacies were included in the analysis. The SDI of communities with newly registered DSHs remained stable during the study period (median 62). By contrast, the SDI of communities with newly registered child sites decreased from a median of 59 in 2010 to 53 in 2022 (-0.18 centiles per year on linear regression, p < 0.001), and the SDI of communities with newly registered contract pharmacies decreased from a median of 72 in 2010 to 53 in 2022 (-0.69 centiles per year on linear regression, p < 0.001), suggesting expansion into areas with lower social deprivation over time.

CONCLUSIONS

340B DSH hospitals have registered new child sites and contract pharmacies in increasingly wealthy areas.

Impact of hospital-physician vertical integration on physician-administered drug spending and utilization

We estimate the effects of hospital-physician vertical integration on spending and utilization of physician-administered drugs for hematology-oncology, ophthalmology, and rheumatology. Using a 100% sample of Medicare fee-for-service medical claims from 2013 to 2017, we find that vertical integration shifts treatments away from physician offices and toward hospital outpatient departments. These shifts are accompanied by increases in physician-administered drug administration spending per procedure for all three specialties. Spending on Part B drugs also increases for hematologist-oncologists. At the same time, physician treatment intensity, as measured by the number of beneficiaries who receive drug infusions/injections and the number of drug infusions, decreases across all three specialties. These results suggest that the incentives of the Medicare reimbursement system, particularly site-of-care payment differentials and outpatient drug reimbursement rates, interact with vertical integration to lead to higher overall spending. Policies and merger guidelines should attempt to restrain spending increases attributed to vertical integration.

Outpatient chemotherapy drug costs and expensive chemotherapy drug use in 340B and Non-340B hospitals: an observational study

BACKGROUND

The 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.

METHODS

This 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.

RESULTS

We 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.

CONCLUSIONS

Hospital 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.

The Association of 340B Program Drug Margins with Covered Entity Characteristics

The 340B Drug Pricing Program aims to help facilities serving low-income and uninsured patients to stretch scarce resources by allowing covered entities to purchase outpatient drugs at federally mandated discounted rates while often receiving reimbursement for them at higher rates by commercial payers and Medicare. Despite increasing focus on the expansion and impact of the program, profit margins under 340B have not been fully explored. We aimed to examine drug-, facility-, and geographic-level factors that influence drug margins among 340B covered entities. We conducted a cross-sectional analysis of predictors of facility-level 340B margins for 5 drug classes in a multivariable regression model using 2021 data linked across multiple proprietary and public datasets. Regression results show that drug, facility characteristics, and geographic healthcare market-level characteristics influence drug margins under the 340B program. Adjusted 340B margins were higher in hospital outpatient departments than free-standing offices (ie, hospital-affiliated physician offices and independent, 340B eligible clinics) and among covered entities in more concentrated (ie, less competitive) markets. Covered entity market power, quantified by a facility-level measure of non-340B drug margins indicating pricing power, and area wealth were both associated with higher 340B drug margins. Margins on 340B drugs were higher among facilities in stronger bargaining positions and those serving wealthier areas. These findings add to the growing body of literature on expansions of the 340B program into more affluent communities, informing calls for reforms to ensure the 340B program serves low-income and uninsured patients.

The 340B Drug Pricing Program and Management of Advanced Prostate Cancer

INTRODUCTION

Oral targeted therapies are a standard of care for men with advanced prostate cancer. However, these therapies are expensive, which may be a barrier to some, particularly the most economically disadvantaged. Through investment in programs to assist this population, savings generated from the 340B program have the potential to mitigate barriers to initiating treatment with targeted therapies in these men.

METHODS

We performed a retrospective study using a 20% national sample of fee-for-service Medicare beneficiaries diagnosed with advanced prostate cancer between 2012 and 2019. The outcome was the patient-level use of a targeted therapy for the first time. This study had two exposures. The first was 340B penetration, representing the percentage of all outpatient hospital revenue in a hospital referral region generated by a 340B hospital. The second was the degree of socioeconomic disadvantage, as measured by the social vulnerability index (SVI). Two separate Cox models were fit to measure relationships between each exposure and use of a targeted therapy. A third model was fitted to assess whether differences in utilization by SVI were mitigated by increasing 340B penetration.

RESULTS

The use of a targeted therapy did not vary with 340B penetration (adjusted HR 1.1, 95% CI 0.96-1.2) for high versus low penetration. Conversely, socioeconomically disadvantaged men were less likely to initiate treatment. Those residing in the third SVI tertile (i.e., most vulnerable) were less likely to start on a targeted therapy compared to men in the first tertile (adjusted HR 0.85, 95% CI 0.78-0.92). However, increasing 340B penetration did not attenuate these differences (Wald test for the interaction term p = 0.10).

CONCLUSIONS

There was no association between a region's 340B penetration and use of a targeted therapy. Furthermore, although the use of a targeted therapy decreased with increased SVI, the 340B penetration of a region did not reduce this gap.

The 340B Program and High-Risk Prescribing of Oral Targeted Therapies for Advanced Prostate Cancer

INTRODUCTION

The use of expensive oral targeted agents for advanced prostate cancer can be influenced by those who stand to gain from their use. The 340B drug pricing program allows eligible hospitals to purchase medications at steep discounts, generating millions of dollars in savings. The extent to which hospitals engage in higher-risk prescribing due to program incentives is unclear.

METHODS

Medicare claims were used to perform a retrospective study of men with advanced prostate cancer. The primary outcome was targeted therapy use in men with high noncancer mortality risk. Secondary outcomes included androgen biosynthesis inhibitor use in men with cardiovascular history, androgen receptor inhibitor use in men with neurocognitive history, and therapy within 14 days of death. Proportional hazards models were used to assess time-to-event outcomes, while logistic regression was used for binary outcomes.

RESULTS

In men with high noncancer mortality risk, targeted therapy use did not differ at 340B participating compared to nonparticipating hospitals (hazard ratio [HR] 1.1, 95% CI 0.67-1.5). There was no difference in androgen biosynthesis inhibitor use in men with a prior cardiac event (HR 0.96, 95% CI 0.70-1.3) or androgen receptor inhibitor use in men with a prior neurocognitive event (HR 1.5, 95% CI 0.65-3.4) in those treated at 340B participating compared to nonparticipating hospitals. Therapy use in the last 14 days of life did not vary by 340B participation (odds ratio 1.3, 95% CI 0.86-1.9).

CONCLUSIONS

In men with advanced prostate cancer, high-risk prescribing and futility measures did not vary by participation in the 340B drug pricing program.

Addressing financial toxicity in cancer treatment-An opportunity for the 340B drug pricing program

Cancer treatment has become increasingly expensive, partially due to the use of specialty drugs. The costs of these drugs are often passed down to patients, who may face the consequences of paying for more than they can afford, leading to financial toxicity. The 340B drug pricing program is a health care policy that may provide an opportunity to mitigate the financial consequences of cancer care. The 340B program requires manufacturers to sell outpatient drugs at a discount to hospitals caring for a significant number of socioeconomically disadvantaged individuals. The program intended for hospitals to use savings from discounted purchases to expand their safety net to vulnerable patients. Some studies have shown that participating hospitals do this by offering more charity and discounted care, whereas others have demonstrated that hospitals fail to sufficiently expand their safety net. A potential flaw of the program is the lack of guidance from governing bodies on how hospitals should use savings from discounted purchases. There has been growing discussion among stakeholders to reform the 340B program given the mixed findings of its effectiveness. With the rising costs of specialty drugs and associated prevalence of financial toxicity in patients with cancer, there is an opportunity to address these issues through reform that improves the program. Directing hospitals to offer specific safety net opportunities, such as passing along discounted drug prices to vulnerable populations, could help the growing number of patients who are financially burdened by medications at the core of the 340B program.

Ethical Gaps in Ophthalmology in the United States

Purpose

To highlight gaps in the professional ethics of ophthalmology.

Design

Perspective.

Methods

Presentation of problematic cases in ophthalmologic ethics with juxtaposition of ethical, legal, and conscientious viewpoints informed by relevant literature.

Results

What is legal, ethical, and conscientious overlap but are not identical. Professional ethical guidelines, when they exist, are stricter than what the law requires, but are silent on several contemporary controversies. Conscientious guidelines can vary from loosest to strictest as they apply to individuals with wide variability. The relationship of ophthalmology to society changes, and ethical guidelines lag for some of the interactions.

Conclusion

The rules of ethics for ophthalmology need to be updated and evidence of activity and oversight made public. Failure to do so invites greater external regulation.

Community social vulnerability and the 340B Drug Pricing Program: Evaluating predictors of 340B participation among critical access hospital

PURPOSE

The federal 340B Drug Pricing Program allows eligible hospitals, including critical access hospitals (CAHs), to obtain outpatient drugs at a discounted rate. CAHs likely benefit from 340B participation because they are often under-resourced and serve at-risk patient populations. The objective of this study was to understand predictors of 340B program participation among CAHs, and how participation varies with community-level social vulnerability.

METHODS

We used a cross-sectional study design to assess the relationship between 340B participation in 2019 and community vulnerability status using 2018 data from the CDC's social vulnerability index (SVI) among acute care CAHs. Analyses used linear probability models adjusted for hospital-level characteristics.

FINDINGS

In bivariate analyses, CAHs participating in the 340B program had lower overall social vulnerability scores, relative to nonparticipating, eligible, and ineligible CAHs, respectively (43.8 vs. 48.7 vs. 64.7, p < 0.10). In adjusted regression models, greater community vulnerability rankings due to socioeconomic status (-0.129, p < 0.05) and minority status and language (-0.092, p < 0.05) were associated with decreased 340B participation. Higher hospital operating margin was associated with increased 340B participation (0.163, p < 0.05). Although the number of for-profit CAHs ineligible for 340B was small, they had the highest community-level social vulnerability score and lowest hospital operating margin on average.

CONCLUSIONS

CAHs located in areas of high community vulnerability are less likely to participate in the 340B program. Some vulnerable patient populations served by CAHs may be excluded from 340B program benefits.

Reforming 340B to Serve the Interests of Patients, Not Institutions

This Viewpoint discusses reforms to the 340B Drug Pricing Program to focus revenues from the program on lower-income and uninsured patients.

The 340B Program and oral specialty drugs for advanced prostate cancer

INTRODUCTION

Expensive oral specialty drugs for advanced prostate cancer can be associated with treatment disparities. The 340B program allows hospitals to purchase medications at discounts, generating savings that can improve care of the socioeconomically disadvantaged. This study assessed the effect of hospital 340B participation on advanced prostate cancer.

METHODS

The authors performed a retrospective cohort study of Medicare beneficiaries with advanced prostate cancer from 2012 to 2019. The primary outcome was use of an oral specialty drug. Secondary outcomes included monthly out-of-pocket costs and treatment adherence. We evaluated the effects of 1) hospital 340B participation, 2) a regional measure vulnerability, the social vulnerability index (SVI), and 3) the interaction between hospital 340B participation and SVI on outcomes.

RESULTS

There were 2237 and 1100 men who received care at 340B and non-340B hospitals. There was no difference in specialty drug use between 340B and non-340B hospitals, whereas specialty drug use decreased with increased SVI (odds ratio, 0.95, p = .038). However, the interaction between hospital 340B participation and SVI on specialty drug use was not significant. Neither 340B participation, SVI, or their interaction were associated with out-of-pocket costs. Although hospital 340B participation and SVI were not associated with treatment adherence, their interaction was significant (p = .020). This demonstrated that 340B was associated with better adherence among socially vulnerable men.

CONCLUSIONS

The 340B program was not associated with specialty drug use in men with advanced prostate cancer. However, among those who were started on therapy, 340B was associated with increased treatment adherence in more socially vulnerable men.

Assessing the Impact of the 340B Drug Pricing Program: A Scoping Review of the Empirical, Peer-Reviewed Literature

Policy Points The 340B Drug Pricing Program accounts for roughly 1 out of every 100 dollars spent in the $4.3 trillion US health care industry. Decisions affecting the program will have wide-ranging consequences throughout the US safety net. Our scoping review provides a roadmap of the questions being asked about the 340B program and an initial synthesis of the answers. The highest-quality evidence indicates that nonprofit, disproportionate share hospitals may be using the 340B program in margin-motivated ways, with inconsistent evidence for increased safety net engagement; however, this finding is not consistent across other hospital types and public health clinics, which face different incentive structures and reporting requirements.

CONTEXT

Despite remarkable growth and relevance of the 340B Drug Pricing Program to current health care practice and policy debate, academic literature examining 340B has lagged. The objectives of this scoping review were to summarize i) common research questions published about 340B, ii) what is empirically known about 340B and its implications, and iii) remaining knowledge gaps, all organized in a way that is informative to practitioners, researchers, and decision makers.

METHODS

We conducted a scoping review of the peer-reviewed, empirical 340B literature (database inception to March 2023). We categorized studies by suitability of their design for internal validity, type of covered entity studied, and motivation-by-scope category.

FINDINGS

The final yield included 44 peer-reviewed, empirical studies published between 2003 and 2023. We identified 15 frequently asked research questions in the literature, across 6 categories of inquiry-motivation (margin or mission) and scope (external, covered entity, and care delivery interface). Literature with greatest internal validity leaned toward evidence of margin-motivated behavior at the external environment and covered entity levels, with inconsistent findings supporting mission-motivated behavior at these levels; this was particularly the case among participating disproportionate share hospitals (DSHs). However, included case studies were unanimous in demonstrating positive effects of the 340B program for carrying out a provider's safety net mission.

CONCLUSIONS

In our scoping review of the 340B program, the highest-quality evidence indicates nonprofit, DSHs may be using the 340B program in margin-motivated ways, with inconsistent evidence for increased safety net engagement; however, this finding is not consistent across other hospital types and public health clinics, which face different incentive structures and reporting requirements. Future studies should examine heterogeneity by covered entity types (i.e., hospitals vs. public health clinics), characteristics, and time period of 340B enrollment. Our findings provide additional context to current health policy discussion regarding the 340B program.

Utilization and outcome disparities in allogeneic hematopoietic stem cell transplant in the United States

Allogeneic hematopoietic stem cell transplant (allo-HSCT) is increasingly being used in the United States (US) and across the world as a curative therapeutic option for patients with certain high-risk hematologic malignancies and non-malignant diseases. However, racial and ethnic disparities in utilization of the procedure and in outcome following transplant remain major problems. Racial and ethnic minority patients are consistently under-represented in the proportion of patients who undergo allo-HSCT in the US. The transplant outcomes in these patients are also inferior. The interrelated driving forces responsible for the differences in the utilization and transplant outcome of the medical intervention are socioeconomic status, complexity of the procedure, geographical barriers, and the results of differences in the genetics and comorbidities across different races. Bridging the disparity gaps is important not only to provide equity and inclusion in the utilization of this potentially life-saving procedure but also in ensuring that minority groups are well represented for research studies about allo-HSCT. This is required to determine interventions that may be more efficacious in particular racial and ethnic groups. Various strategies at the Federal, State, and Program levels have been designed to bridge the disparity gaps with varying successes. In this review paper, we will examine the disparities and discuss the strategies currently available to address the utilization and outcome gaps between patients of different races in the US.

340B Contract pharmacy growth by pharmacy ownership: 2009-2022

The 340B program grants eligible health care providers ("covered entities") access to discounted prices for outpatient prescription drugs. Covered entities frequently rely on retail pharmacies ("contract pharmacies") to dispense discounted drugs. This analysis describes contract pharmacy participation by ownership: the top 4 chains, grocery chains, small chains, and institutional independent pharmacies. We found that 71% of pharmacies in the top 4 chains were contract pharmacies. Forty one percentage of institutional pharmacies, 38% of grocery store pharmacies, and 22% of independent pharmacies participated in 340B in 2022. The median number of contracts per pharmacy was 2 among the top 4 chains and grocery store pharmacies vs 1 for all other pharmacy types. The median farthest distance in miles from contracting covered entities was largest for the top 4 chains (19 miles) and small chains (18 miles) and smallest for independent and institutional pharmacies (10 miles). The top 4 chains held the highest proportion of contracts with core safety-net providers (75% vs 61% of institutional pharmacies).

Outcomes of the 340B Drug Pricing Program: A Scoping Review

Importance

The 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.

Objective

To assess the literature on the foundations of and outcomes associated with the 340B program.

Evidence Review

The 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.

Findings

Among 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 Relevance

In 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.

The impacts of the 340B Program on health care quality for low-income patients

OBJECTIVE

To assess the effects of hospital 340B eligibility on quality of inpatient care provided to Medicaid and uninsured patients and for all patients.

DATA

Agency for Health Care Research and Quality's Healthcare Cost and Utilization Project State Inpatient Data, Hospital Cost Reporting Information System Data, Office of Pharmacy Affairs Information System Data, and American Hospital Association Annual Survey.

DESIGN

Regression discontinuity design comparing hospitals just above the DSH percentage program eligibility threshold to those just below. Quality measures include all-cause mortality and 30-day readmission rates as well as condition-specific measures.

DATA EXTRACTION

Inpatient data from general acute care hospitals from 2008 to 2014 in 15 states. Data linked on hospital 340B eligibility and participation.

PRINCIPAL FINDINGS

We did not find discontinuities in inpatient care quality across the Program eligibility threshold for Medicaid and uninsured patients; specifically, on all-cause mortality (beta = -0.04 percentage points, 95% CI: -0.16, 0.08), 30-day readmission rates (beta = -0.16 percentage points, 95% CI: -0.81, 0.5), or other measures. Among insured and non-Medicaid patients, we found discontinuities for acute myocardial infarction (beta = -0.87 percentage points, 95% CI: -1.55, -0.2) and postoperative sepsis (beta = -0.15 percentage points, 95% CI: -0.23, -0.07) mortality.

CONCLUSIONS

340B Program participation has not demonstrated improved quality of inpatient care among Medicaid or uninsured patients.

340B-Where Do We Go From Here?

This Viewpoint summarizes inefficiencies in the 340B program and provides suggestions for equitable reform that will potentially benefit patients.

Access To Oncology Services In Rural Areas: Influence Of The 340B Drug Pricing Program

Rural-urban cancer disparities, including greater mortality rates, are partially attributable to the limited availability of oncology services in rural communities. Without these services, rural residents may experience delays in timely treatment and may be less likely to complete recommended care. The 340B Drug Pricing Program allows eligible not-for-profit and public hospitals to purchase covered outpatient drugs, including high-cost oncology drugs, at discounted prices. Using 2011-20 data, we evaluated the relationship between new enrollment in the 340B program and oncology services initiation in rural general acute care hospitals that lacked oncology services in 2011. Compared with hospitals that remained unenrolled in the 340B program through 2020, hospitals that enrolled during 2012-18 were 8.3 percentage points more likely to have added oncology services as of 2020. The newly participating hospitals that added oncology services were disproportionately located in Medicaid expansion states and in counties with lower uninsurance rates. These findings suggest that the 340B program facilitates expanded access to oncology services in some rural communities, but opportunities remain to address disparities in the most disadvantaged service areas.

The impact of the 340B Drug Pricing Program on Critical Access Hospitals: Evidence from Medicare Part B

I study the impact of expanding the 340B Drug Pricing Program to include Critical Access Hospitals (CAH) on Medicare Part B drug utilization and spending. The 340B program entitles certain hospitals and clinics to discounts on most outpatient drugs. In 2010, the Affordable Care Act expanded 340B eligibility to CAHs - small rural hospitals that receive cost-based reimbursement from Medicare. Exploiting variation in the predicted exposure to the 340B expansion in a difference-in-differences method, I find that the 340B expansion reduced Part B drug spending but did not affect Part B drug utilization. This finding contrasts with existing evidence about 340B's impact on hospitals but is consistent with the prediction that cost-based reimbursement dampens the incentives created by the 340B discounts. I also find suggestive evidence that CAHs passed the cost savings from 340B on to patients. These results add new perspectives to the ongoing debate over 340B.

Salve Lucrum: The Existential Threat of Greed in US Health Care

In this Viewpoint, Donald Berwick explores the pursuit of profit in US health care across sectors—such as pharmaceutical companies, insurers, hospitals, and physician practices—and its harms to patients, and then offers potential solutions.

Disentangling the Cost of Orphan Drugs Marketed in the United States

The increasing number and high prices of orphan drugs have triggered concern among patients, payers, and policymakers about the affordability of new drugs approved using the incentives set by the Orphan Drug Act (ODA) of 1983. This study evaluated the factors associated to the differences in the treatment cost of new orphan and non-orphan drugs approved by the FDA from 2017 to 2021. A generalized linear model (GLM) with the Gamma log-link analysis was used to ascertain the association of drug characteristics with the treatment costs of orphan and non-orphan drugs. The results of the study showed that the median and interquartile range (IQR) drug cost was USD 218,872 (IQR = USD 23,105) for orphan drugs and USD 12,798 (IQR = USD 57,940) for non-orphan drugs (p < 0.001). Higher market entry prices were associated with biologics (108%; p < 0.001), orphan status (177%; p < 0.001), US sponsor companies (48%; p = 0.035), chronic use (1083%; p < 0.001), treatment intent (163%; p = 0.004), and indications for oncology (624%; p < 0.001) or genetic disorders (624%; p < 0.001). Higher market entry treatment cost for newly approved drugs were associated with biologics, orphan status, US sponsor companies, chronic use, therapeutic intent, and indications for oncology or genetic disorders.

The 340B Program and Health Disparities Among Medicare Beneficiaries With Chronic Asthma

The study objective was to determine whether the discounts provided under the 340B program help address disparities in drug treatment and adverse outcomes among Medicare Fee-For-Service (FFS) beneficiaries initially Medicare-diagnosed with moderate to severe chronic asthma. Using Medicare FFS claims data from 2017 to 2019, we conducted a cross-sectional study that compared risk-adjusted differences in 5 treatment measures and 5 adverse outcomes among beneficiaries treated within 340B and non-340B hospital systems that met the disproportionate share (DSH) criteria and the ownership classification requirement to qualify as a 340B DSH hospital. Our analysis focused on potential disparities that are historically associated with challenges to accessing quality health care. We did not observe fewer disparities in drug treatments or adverse outcomes for beneficiaries with moderate to severe asthma treated at 340B hospital systems compared to non-340B hospital systems. These results raise questions as to whether 340B hospital systems are effectively using discounts to focus on improved access and outcomes for vulnerable beneficiaries.

Disparities in geographic access to medical oncologists

OBJECTIVE

The objective of this study is to identify disparities in geographic access to medical oncologists at the time of diagnosis.

DATA SOURCES/STUDY SETTING

2014-2016 Pennsylvania Cancer Registry (PCR), 2019 CMS Base Provider Enrollment File (BPEF), 2018 CMS Physician Compare, 2010 Rural-Urban Commuting Area Codes (RUCA), and 2015 Area Deprivation Index (ADI).

STUDY DESIGN

Spatial regressions were used to estimate associations between geographic access to medical oncologists, measured with an enhanced two-step floating catchment area measure, and demographic characteristics.

DATA COLLECTION/EXTRACTION METHODS

Medical oncologists were identified in the 2019 CMS BPEF and merged with the 2018 CMS Physician Compare. Provider addresses were converted to longitude-latitude using OpenCage Geocoder. Newly diagnosed cancer patients in each census tract were identified in the 2014-2016 PCR. Census tracts were classified based on rurality and socioeconomic status using the 2010 RUCA Codes and the 2015 ADI.

PRINCIPAL FINDINGS

Large towns and rural areas were associated with spatial access ratios (SPARs) that were 6.29 lower (95% CI -16.14 to 3.57) and 14.76 lower (95% CI -25.14 to -4.37) respectively relative to urban areas. Being in the fourth ADI quartile (highest disadvantage) was associated with a 12.41 lower SPAR (95% CI -19.50 to -5.33) relative to the first quartile. The observed difference in a census tract's non-White population from the 25th (1.3%) to the 75th percentile (13.7%) was associated with a 13.64 higher SPAR (Coefficient = 1.10, 95% CI 11.89 to 15.29; p < 0.01), roughly equivalent to the disadvantage associated with living in the fourth ADI quartile, where non-White populations are concentrated.

CONCLUSIONS

Rurality and low socioeconomic status were associated with lower geographic access to oncologists. The negative association between area deprivation and geographic access is of similar magnitude to the positive association between larger non-White populations and access. Policies aimed at increasing geographic access to care should be cognizant of both rurality and socioeconomic status.

Hospital-Administered Cancer Therapy Prices for Patients With Private Health Insurance

Importance

The federal Hospital Price Transparency final rule, which became effective in 2021, requires hospitals to publicly disclose payer-specific prices for drugs. However, little is known about hospital markup prices for parenterally administered therapies.

Objective

To assess the extent of price markup by hospitals on parenterally administered cancer therapies and price variation among hospitals and between payers at each hospital.

Design, Setting, and Participants

A cross-sectional analysis was conducted of private payer-specific negotiated prices for the top 25 parenteral (eg, injectable or infusible) cancer therapies by Medicare Part B spending in 2019 using publicly available hospital price transparency files. Sixty-one National Cancer Institute (NCI)-designated cancer centers providing clinical care to adults with cancer were included. The study was conducted from April 1 to October 15, 2021.

Exposures

Estimated hospital acquisition costs for each cancer therapy using participation data from the federal 340B Drug Pricing Program.

Main Outcomes and Measures

The primary outcome was hospital price markup for each cancer therapy in excess of estimated acquisition costs. Secondary outcomes were the extent of across-center price ratios, defined as the ratio between the 90th percentile and 10th percentile median prices across centers, and within-center price ratios, defined as the ratio between the 90th percentile and 10th percentile prices between payers at each center.

Results

Of 61 NCI-designated cancer centers, 27 (44.3%) disclosed private payer-specific prices for at least 1 top-selling cancer therapy as required by federal regulations. Median drug price markups across all centers and payers ranged between 118.4% (sipuleucel-T) and 633.6% (leuprolide). Across-center price ratios ranged between 2.2 (pertuzumab) and 15.8 (leuprolide). Negotiated prices also varied considerably between payers at the same center; median within-center price ratios for cancer therapies ranged from 1.8 (brentuximab) to 2.5 (bevacizumab).

Conclusions and Relevance

Most NCI-designated cancer centers did not publicly disclose payer-specific prices for cancer therapies as required by federal regulation. The findings of this cross-sectional study suggest that, to reduce the financial burden of cancer treatment for patients, institution of public policies to discourage or prevent excessive hospital price markups on parenteral chemotherapeutics might be beneficial.

Economic Evaluation of Changes in Reimbursement for Medications Purchased Through the 340B Drug Pricing Program

Background: The Centers for Medicare and Medicaid Services (CMS) implemented changes to the reimbursement scheme for 340B-acquired medications on January 1, 2018, reducing payments by approximately 25%. It was recognized that these changes would have a significant fiscal impact to Medical University of South Carolina (MUSC) Health. The purpose of this assessment was to review the financial impact of changes in Medicare reimbursement for clinic-administered medications. Methods: This study was a single-center, retrospective, financial evaluation of closed outpatient encounters for Medicare beneficiaries in calendar year 2018. Actual reimbursement was calculated for 2018. To better characterize the margin obtained, exploratory analyses were completed to identify best- and worst-case reimbursement outcomes. This exploratory analysis was conducted for both the new (ASP-22.5%) and old (ASP+6%) reimbursement schemes. Results: Overall, 10 973 encounters were reviewed for inclusion. Ultimately, 8028 encounters were included in the final analysis. Of all encounters, 88 unique medications were administered. Most of the drugs (55%) were associated with oncologic indications. An unfavorable variance was found in 3761 encounters (47%). The actual reimbursement margin for 2018 was $3 193 525. Conclusion: Changes to reimbursement outlined by the CMS at the start of 2018 resulted in decreased reimbursement for 340B-eligible, clinic-administered medications. Most of the unfavorable variances were associated with 340B acquisition prices that exceeded reimbursement. Although the original intent of the 340B Drug Pricing Program was to stretch federal resources, decreased payments could reduce institutional ability to fund programs that support medically vulnerable populations.

The Growing Divide in the Composition of Public Health Delivery Systems in US Rural and Urban Communities, 2014-2018

Objectives. To examine changes in the scope of activity and organizational composition of public health delivery systems serving rural and urban US communities between 2014 and 2018.Methods. We used data from the National Longitudinal Survey of Public Health Systems to measure the implementation of recommended public health activities and the network of organizations contributing to these activities in a nationally representative cohort of US communities. We used multivariable regression models to test for rural-urban differences between 2014 and 2018.Results. The scope of recommended activities implemented in rural areas declined by 3.4 percentage points between 2014 and 2018, whereas it increased by 1.4 percentage points in urban areas. The rural-urban disparity in scope of activities grew by a total of 4.8 percentage points (P < .05) over this time. The disparity in network density grew by 2.3 percentage points (P < .05).Conclusions. Urban public health systems have enhanced their scope of activities and organizational networks since 2014, whereas rural systems have lost capacity. These trends suggest that system improvement initiatives have had uneven success, and they may contribute to growing rural-urban disparities in population health status.

Relationship between initiation of 340B participation and hospital safety-net engagement

OBJECTIVE

The 340B program allows safety-net hospitals to acquire discounted outpatient drugs and charge payers full price. We examined whether 340B participation increases safety-net engagement.

DATA SOURCES

340B participation data, Medicare hospital cost reports, American Hospital Association Survey, and Schedule 990 nonprofit hospital tax returns.

STUDY DESIGN

Quasi-experimental difference-in-differences design comparing 340B hospitals (the "treatment" group) before and after participating to changes over time to three alternative "control" groups: all other nonprofit and public hospitals, hospitals that are not participating during our study, and hospitals that were not-yet-participating but started after 2015. Outcome measures include a range of safety-net care measures that are alternatives to the standard uncompensated care: charity care, community benefit spending, charity care policies, and low-profit service-line provision.

DATA EXTRACTION

We extracted data on all nonprofit and public hospitals from 2011 to 2015. We linked 340B participation data to Medicare hospital cost reports and American Hospital Association data using Medicare hospital identifiers. 990 Data was linked on name and address.

PRINCIPAL FINDINGS

New 340B participation was not associated with a change in uncompensated care, but was associated with a 28.9 percent increase in charity care spending (SE = 8.8), or about $880,000 per hospital. However, total community benefit spending (including charity care) did not change. 340B was associated with an increase in the probability of offering discounted care (4.3 percentage points, SE = 1.6) from 84 to 88 percent and an increase in the income eligibility limit for discounted care (18.9 percentage points, SE = 5.6) from 294 to 313 percent. Participation was not associated with the probability of offering low-profit medical care services.

CONCLUSIONS

Alternative measures show that newly participating hospitals may increase charity care, potentially through offering more patients discounted care. However, increases appear to be fully offset by reductions in other community benefit programs.

The 340b Program, Contract Pharmacies, Hospitals, and Patients: An Evolving Relationship Impacting Health Care Delivery

The 340B Drug Pricing Program, created by Congress in 1992 through the Veterans Health Care Act, has provided discounted drug prices to hospitals and other health care organizations serving a wide population of low-income patients. Some 340B programs use contract pharmacies, an arrangement whereby the hospital or health care organization signs a contract directly with a pharmacy to provide covered pharmacy services at discounted prices. The federal 340B Drug Pricing Program has provided access to reduced price prescription drugs to more than 35 000 individual health care facilities and sites certified by the US Department of Health and Human Services, and clinics have served more than 10 million people in all 50 states, plus commonwealths and US territories. The 340B program has increased profits for hospitals through contract pharmacies because they have still received the same reimbursement but acquired drugs at a lower rate.

Developing and Validating a Measure to Estimate Poverty in Medicare Administrative Data

OBJECTIVE

To develop and validate a measure that estimates individual level poverty in Medicare administrative data that can be used in studies of Medicare claims.

DATA SOURCES

A 2008 to 2013 Medicare Current Beneficiary Survey linked to 2008 to 2013 Medicare fee-for-service beneficiary summary file and census data.

STUDY DESIGN AND METHODS

We used the Medicare Current Beneficiary Survey to define individual level poverty status and linked to Medicare administrative data (N=38,053). We partitioned data into a measure derivation dataset and a validation dataset. In the derivation data, we used a logistic model to regress poverty status on measures of dual eligible status, part D low-income subsidy, and demographic and administrative data, and modeled with and without linked census and nursing home data. Each beneficiary receives a predicted poverty score from the model. Performance was evaluated in derivation and validation data and compared with other measures used in the literature. We present a measure for income-only poverty as well as one for income and asset poverty.

PRINCIPAL FINDINGS

A score (predicted probability of income poverty) >0.5 yielded 58% sensitivity, 94% specificity, and 84% positive predictive value in the derivation data; our score yielded very similar results in the validation data. The model's c-statistic was 0.84. Our poverty score performed better than Medicaid enrollment, high zip code poverty, and zip code median income. The income and asset version performed similarly well.

CONCLUSIONS

A poverty score can be calculated using Medicare administrative data for use as a continuous or binary measure. This measure can improve researchers' ability to identify poverty in Medicare administrative data.

Practice Patterns for Older Adult Patients With Advanced Cancer: Physician Office Versus Hospital Outpatient Setting

PURPOSE

A shift in outpatient oncology care from the physician's office to hospital outpatient settings has generated interest in the effect of practice setting on outcomes. Our objective was to examine whether medical oncologists' prescribing of drugs and services for older adult patients with advanced cancer is used more in physicians' offices compared with hospital outpatient departments.

METHODS

This was a retrospective comparative study. SEER-Medicare data (2004 to 2011) were used to identify Medicare beneficiaries diagnosed with advanced breast, colon, esophagus, non-small-cell lung, pancreatic, or stomach cancer. Between physicians' offices and hospital outpatient departments, we compared use of selected likely low-value supportive drugs, low-value therapeutic drugs, chemotherapy-related hospitalizations, and hospice. We used hierarchical modeling to assess differences between settings to account for correlation within physicians.

RESULTS

Compared with patients treated in a hospital outpatient department, those treated in a physician's office setting were more likely to receive erythropoiesis-stimulating agents (odds ratio, 1.72; 95% CI, 1.53 to 1.94) and granulocyte colony-stimulating factors (odds ratio, 1.28; 95% CI, 1.18 to 1.38). For combination chemotherapy and nanoparticle albumin-bound-paclitaxel in patients with breast cancer, there was a trend toward higher use in physicians' offices, although this was not statistically significant. Chemotherapy-related hospitalizations and hospice did not vary by setting.

CONCLUSION

We found somewhat higher use of several drugs for patients with advanced cancer in physicians' office settings compared with hospital outpatient departments. Findings support research to dissect the mechanisms through which setting might influence physicians' behavior.

Examining the Benefits of the 340b Drug Discount Program

The 340B Drug Discount Program required drug manufacturers to provide discounted outpatient drugs to health care organizations serving vulnerable patient populations to allow these institutions to offer more services to more people. As the 340B program expanded, controversy centered on which entities have benefited from the program. Many health care organizations sold 340B drugs to well-insured patients at full price and have thus been financially rewarded. Amendments to the program have permitted 340B providers to use contract pharmacies to dispense 340B medications, furthering the debate over which stakeholders are benefiting from the program. The purpose of this study was to determine which stakeholders benefited because of the 340B Drug Discount Program and what have been the drivers of recent changes to the program. The study used a literature review. One database aggregator and six academic databases were used to collect 70 total sources. These sources were reviewed and reduced to 39 sources, which were used in the written research. Of these, 20 sources were used in the Results section. Research showed that 340B eligible entities and contract pharmacies have financially benefited from the 340B program. Patient benefit has been indirect, as qualified providers have expanded service offerings and increased access to health care services. Regulatory reform, as well as profit potential, has driven the expansion of 340B as more providers have expanded eligible service lines. Although the goal of the 340B program has often been misconstrued, direct financial benefits to eligible providers have allowed for this expansion of access.

Achieving high value care for all and the perverse incentives of 340B price agreements

Section 340B of the Public Health Service Act requires drug manufacturers to enter into price agreements with the Department of Health and Human Services. These agreements result in variation in the price paid to acquire a drug by sector, which complicates the price used in cost-effectiveness analyses. We describe the transactions and sectors in a 340B agreement using a multiple sclerosis drug. Cost-effectiveness estimates were calculated for the drug using drug prices from the manufacturer and payer perspective. We found the amount paid to the manufacturer (340B price) was a good value ($118,256 per quality-adjusted life-year); however, from the payer drug cost perspective, good value ($196,683 per quality-adjusted life-year) was not achieved. Given that emerging value frameworks incorporate cost-effectiveness, these price variations may have downstream negative consequences, including inaccurate coverage and reimbursement policy recommendations. Upcoming policy changes to the 340B program should incentivize pricing schemes hinged on transparency and value.

Using 340B drug discounts to provide a financially sustainable medication discharge service

The 340B Drug Pricing Program was intended to stretch federal resources by providing significant discounts to covered entities providing care to underserved populations. Program implementation and evidence of expanding services to higher income patients has brought more scrutiny and calls for elimination of the program. While additional review and reform may be warranted, profitability from 340B discounts enables covered entities to provide additional services that may not be feasible in absence of the program. This case report demonstrates one institution's use of 340B discounts to financially justify providing bedside medication delivery services for patients at the time of discharge from an inpatient admission. A simple financial model was developed using hospital data and inputs from available literature to estimate gross profit and earnings before interest, taxes, depreciation, and amortization (EBITDA) with and without 340B discounts. Without the 340B drug price discounts, the service would operate at a financial loss, and further investigation must be done to determine whether other clinical or economic benefits would warrant discharge medication delivery at the institution.

Consequences of the 340B Drug Pricing Program

BACKGROUND

The 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.

METHODS

We 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.

RESULTS

Hospital 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.

CONCLUSIONS

The 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.).

Has The Era Of Slow Growth For Prescription Drug Spending Ended?

In the period 2005-13 the US prescription drug market grew at an average annual pace of only 1.8 percent in real terms on an invoice price basis (that is, in constant dollars and before manufacturers' rebates and discounts). But the growth rate increased dramatically in 2014, when the market expanded by 11.5 percent-which raised questions about future trends. We determined the impact of manufacturers' rebates and discounts on prices and identified the underlying factors likely to influence prescription spending over the next decade. These include a strengthening of the innovation pipeline; consolidation among buyers such as wholesalers, pharmacy benefit managers, and health insurers; and reduced incidence of patent expirations, which means that fewer less costly generic drug substitutes will enter the market than in the recent past. While various forecasts indicate that pharmaceutical spending growth will moderate from its 2014 level, the business tension between buyers and sellers could play out in many different ways. This suggests that future spending trends remain highly uncertain.

Impact of the 340B Drug Pricing Program on Cancer Care Site and Spending in Medicare

OBJECTIVE

To examine the impact of the 340B drug discount program on the site of cancer drug administration and cancer care spending in Medicare.

DATA SOURCES/STUDY SETTING

2010-2013 Medicare claims data for a random sample of Medicare Fee-for-Service beneficiaries with cancer.

STUDY DESIGN

We identified the 340B effect using variation in the availability of 340B hospitals across markets. We considered beneficiaries from markets that newly gained a 340B hospital during the study period (new 340B markets) as the treatment group. Beneficiaries in markets with no 340B hospital were the control group. We used a difference-in-differences approach with market fixed effects.

DATA COLLECTION

Secondary data analysis.

PRINCIPAL FINDINGS

The probability of a patient receiving cancer drug administration in hospital outpatient departments (HOPDs) versus physician offices increased 7.8 percentage points more in new 340B markets than in markets with no 340B hospital. Per-patient spending on other cancer care increased $1,162 more in new 340B markets than in markets with no 340B hospital.

CONCLUSIONS

The 340B program shifted the site of cancer drug administration to HOPDs and increased spending on other cancer care. As the program expands, continuing assessment of its impact on service utilization and spending would be needed.

Exploring the Healthcare Environment and Associations with Clinical Outcomes of People Living with HIV/AIDS

Despite three decades of dramatic treatment breakthroughs in antiretroviral regimens, clinical outcomes for people living with HIV vary greatly. The HIV treatment cascade models the stages of care that people living with HIV go through toward the goal of viral suppression and demonstrates that <30% of those living with HIV/AIDS in the United States have met this goal. Although some research has focused on the ways that patient characteristics and patient-provider relationships contribute to clinical adherence and treatment success, few studies to date have examined the ways that contextual factors of care and the healthcare environment contribute to patient outcomes. Here, we present qualitative findings from a mixed-methods study to describe contextual and healthcare environment factors in a Ryan White Part C clinic that are associated with patients' abilities to achieve viral suppression. We propose a modification of Andersen's Behavioral Model of Health Services Utilization, and its more recent adaptation developed by Ulett et al., to describe the ways that clinic, system, and provider factors merge to create a system of care in which more than 86% of the patient population is virally suppressed.

Pharmacy accessibility and cost-related underuse of prescription medications in low-income Black and Hispanic urban communities

OBJECTIVES

Policy efforts to reduce the cost of prescription medications in the US have failed to reduce disparities in cost-related underuse. Little is known about the relationships between pharmacy accessibility, utilization, and cost-related underuse of prescription medications among residents of low-income minority communities. The aim of this work was to examine the association between pharmacy accessibility, utilization, and cost-related underuse of prescription medications among residents of predominantly low-income Black and Hispanic urban communities.

METHODS

Data from a population-based probability sample of adults 35 years of age and older residing on the South Side of Chicago in 2012-2013 were linked with the use of geocoded information on the type and location of the primary and the nearest pharmacy. Multivariable regression models were used to examine associations between pharmacy accessibility, utilization of and travel distance to the primary pharmacy, and cost-related underuse overall and by pharmacy type.

RESULTS

One-third of South Side residents primarily filled their prescriptions at the pharmacy nearest to their home. Among those who did not use mail order, median distance traveled from home to the primary pharmacy was 1.2 miles. Residents whose primary pharmacy was at a community health center or clinic where they usually received care traveled the farthest but were least likely to report cost-related underuse of their prescription medications.

CONCLUSION

Most residents of minority communities on Chicago's South Side were not using the pharmacies closest to their home to obtain their prescription medications. Efforts to improve access to prescription medications in these communities should focus on improving the accessibility of affordable pharmacies at site of care.