![]() Impact of contract pharmacy restriction policies 340B program growth for the 10 USC2 disease areas with the highest total sales in 2021 (sales decrease down the vertical axis). Diabetes was disproportionately impacted by those restrictions (see next section) because among some of the largest diabetes products, more than half of their 340B sales flowed through retail channels, they were penny priced, and their manufacturers were among the first to implement contract pharmacy restrictions.įig. 340B sales of diabetes products showed a reverse trend, falling 7.4% year-on-year in 2021 versus the 22% growth they'd experienced in 2020, due in large part to contract pharmacy restrictions. Sales based on WAC pricing.ĭisease areas with specialty products, such as targeted oncology, immunology, and anti-arthritics including well-known blockbuster biologic products, continued to show some of the highest 340B growth in 2021 (Figure 2). 340B sales grew 15.9% year-on-year in 2021 and total sales grew 6.6%, versus 18.1% and 4.0% growth in 2020, respectively.įig. In 2021, 340B program sales reached $93.6 billion (Figure 1), versus total pharmaceutical sales of $668.3 billion (see Analysis Methods for further details about the data and methodology used). In the first quarter of recent years, IQVIA has published estimates of the 340B program’s size and growth as part of an ongoing program-related series of articles 1, 2. The lowered Medicare reimbursement to hospitals lowers the enrollee’s coinsurance because Medicare would pay hospitals less for the drug.The 340B Drug Discount Program, launched in 1992, is designed to give Medicaid-like discounts on covered outpatient drugs to qualifying healthcare providers. Medicare patients typically are responsible for a percentage of coinsurance on their prescriptions. If the new rule holds, Medicare beneficiaries will save an estimated $320 million a year on copayments. The poor do not get the benefits.Ĭritics respond that the 340B needs reform, such as limiting which hospitals should be eligible for 340B price breaks and making sure needy patients benefit when hospitals buy discounted drugs. In contrast, those supporting the cut, including drugmakers, argue that the program has grown beyond its original intent because hospitals have pocketed the discounts to pad profits. Lobbyists for the 340B say, funding cuts, may put small rural hospitals out of business. now buy drugs through the program, according to their reports. About 40 percent of the hospitals in the U.S. In recent years, the Government Accountability Office and the Office of Inspector General, have evaluated 340B’s explosive growth. ![]() They argue that the agency lacks the authority to slash the payments and that they are undermining the intent Congress had when creating the program. The American Hospital Association, and others filed suit on Nov. Earlier this month, The Centers for Medicare & Medicaid Services (CMS) announced a final rule to cut Medicare payments for hospitals enrolled in the program by 28 percent, or about $1.6 billion. This program now faces a fight for survival as lawmakers debate the program’s reach. Ostensibly, hospitals make money on the spread, using it to improve the financial stability of the hospital.ģ40B: Program Now Coming Under Close Scrutiny The drugs are purchased under the Part B program, which covers expensive chemotherapy and other treatments in a hospital, doctor’s office and clinics. Under 340B, named after the section of the Public Health Service Act that authorizes it, eligible hospitals buy drugs at a discount from the pharmaceutical companies and then are reimbursed for those purchases from Medicare. Hospitals, skilled nursing homes, pharmacies, and health care facilities are eligible. The program, known as 340B, requires pharmaceutical companies to give steep discounts to hospitals and clinics that serve high volumes of low-income patients. The 340B Drug Pricing Program was created in 1992 by the Federal Government to provide significant discounts on outpatient prescription drugs.
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