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Consequences of the 340B Drug Pricing Program.

Sunita Desai1, J Michael McWilliams1

  • 1From the Department of Population Health, New York University, New York (S.D.); and the Department of Health Care Policy, Harvard Medical School (S.D., J.M.M.), and the Division of General Internal Medicine and Primary Care, Brigham and Women's Hospital (J.M.M.) - both in Boston.

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The 340B Drug Pricing Program increased hospital-physician consolidation and outpatient drug use, particularly in oncology and ophthalmology. However, it did not demonstrably improve care or reduce mortality for low-income patients.

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Area of Science:

  • Health Economics
  • Health Services Research
  • Pharmaceutical Policy

Background:

  • The 340B Drug Pricing Program offers drug discounts to eligible hospitals, aiming to benefit underserved populations.
  • Program eligibility is tied to Disproportionate Share Hospital (DSH) adjustment percentages, reflecting low-income patient volume.
  • Current program structure lacks direct incentives for hospitals to allocate financial gains towards enhancing care for low-income patients.

Purpose of the Study:

  • To evaluate the impact of the 340B Program on hospital-physician consolidation.
  • To assess the program's effect on outpatient parenteral drug administration in key specialties.
  • To examine the program's influence on care provision and mortality for low-income patients.

Main Methods:

  • Utilized Medicare claims data and a regression-discontinuity design based on the DSH percentage threshold (>11.75%).
  • Focused on general acute care hospitals and three specialties with high parenteral drug use: hematology-oncology, ophthalmology, and rheumatology.
  • Analyzed hospital-physician consolidation, parenteral drug claims, care provision, and mortality rates for low-income patient groups.

Main Results:

  • Hospital eligibility for the 340B Program correlated with increased hematologist-oncologists (230%) and ophthalmologists (900%) in hospital-owned facilities.
  • Program participation was linked to significant increases in hospital-billed parenteral drug claims in hematology-oncology (90%) and ophthalmology (177%).
  • No significant differences were observed in the provision of safety-net care, inpatient care, or mortality rates for low-income populations.

Conclusions:

  • The 340B Program is associated with increased hospital-physician consolidation, particularly in oncology.
  • The program has led to greater hospital-based administration of parenteral drugs in oncology and ophthalmology.
  • Evidence does not support that financial gains from the 340B Program have translated into expanded care or reduced mortality for low-income patients.