Association of 340B entity eligibility with changes in hospital financial performance

The 340B program requires pharmaceutical manufacturers to provide discounts on drug purchases to hospitals caring for a large share of vulnerable populations. Recent concerns raised by legislators and regulators have highlighted potential misuse of revenue from the program. Thus, we explored changes in the financial performance of 340B-eligible hospitals.

Focusing on 340B-eligible hospitals (excluding critical access hospitals), we used 2023 data from Medicare Cost Reports and the Office of Pharmacy Affairs Information System to identify changes in several measures of financial performance among 340B and non-340B hospitals. Descriptive statistics and linear regressions were used to estimate the magnitude of associations.

The average 340B hospital was associated with 47.5% (95% CI: 36.7%-58.3%) greater total assets. The number of 340B sites was associated with higher real asset growth, with 10 additional 340B sites associated with a 0.15% (95% CI: 0.05%-0.25%) increase in the real asset growth rate. 340B hospitals also exhibited higher spending on administrative salaries than non-340B hospitals.

These findings suggest that 340B-eligible hospitals have had consistently strong financial performance, surpassing non-340B-eligible hospitals. The results provide insight into the ongoing policy debates surrounding how 340B hospitals use proceeds from the program.