Growth in 340B program rapid in recent years

The 340B drug discount program for safety-net hospitals is apparently much bigger than previously thought.

That is the conclusion of the Community Oncology Alliance (COA), which commissioned the Berkeley Research Grop to conduct a study on the topic.

The hospitals participating in the 340B program accounted for 58 percent of all Medicare Part B outpatient hospital reimbursements in 2013, up from 43 percent in 2010, according to the COA. And for cancer drugs alone, 340B hospitals accounted for more than 60 percent of all Part B reimbursements in 2013, up from 47 percent in 2010.

The study concluded that the average reimbursement for Part B oncology drugs is 52 percent higher in 340B hospitals compared to what is paid to cover Medicare beneficiaries reveiving the same care at community cancer clinics.  And 340B hospitals saw a 123 percent increase in total Part B reimbursement for oncology drugs during that same time period.

Moreover, hospitals newly enrolled in 340B between 2010 and 2013 accounted for 23 percent of all Part B outpatient drug spending by the end of the study period, according to the report.

The 340B program has come under some scrutiny in recent years, including a recent report suggesting that its participants do not provide enough charity care in exchange for the discounts they receive for drugs.

The Health Resources Services Administration (HRSA) released draft "mega-guidance" for the 340B program earlier this summer that is intended to curtail what is seen by some observers as abuses, such as the reselling of drugs, although there is nothing that addresses the rapidity of the program's growth.

"The 340B program is a critical safety net for patients in need in the hospital setting," said COA President Bruce Gould, M.D., in a statement. "However, I am shocked at how big the program is, as revealed by this new study, and am very concerned about the higher costs of cancer treatment for patients and Medicare in 340B sites."

To learn more:
- read the COA study (.pdf)
- check out the COA statement

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