- New Research on 340B Program Spending Highlights Differences Among Covered Entities
- 340B Reporting Requirement Added to Medicare Telehealth Bill
by Elizabeth ‘Issie’ Karan, Legal Counsel
In a presentation at the 13th Annual Conference of the American Society of Health Economists, Congressional Budget Office (CBO) analysts presented findings from their analysis of data from the Health Resources and Services Administration (HRSA) on spending in the 340B Program. Included in the presentation are data measures that show spending in the 340B program by National Drug Code, by the type of facility where drugs were prescribed, and by whether drugs were distributed through a contract pharmacy.
Overall, researchers found that spending on pharmaceuticals in the 340B drug discount program went from nearly $7 billion in 2010 to $44 billion by 2021—a 19% annual increase—according to preliminary CBO estimates released this week. Although this trend sounds substantial, it tracks overall increases in launch prices over that same period. For example, one study estimated that launch prices, from 2008 to 2021, increased exponentially by 20% per year. So, while industry may want to blame 340B covered entities utilization for 340B Program growth, they must face the role of their own pricing in the increase.
More interesting, perhaps, for the Hemophilia Treatment Center (HTC) community, were the analysts break down of 340B spending by provider type and drug class. For example, findings showed that hospital-based facilities spent significantly more on 340B drugs in 2021 than federal grantees—about $38 billion compared to nearly $6 billion, respectively. The analysts also noted that 73% of the 340B spending growth during the 2020 – 2021, 11-year period can be attributed to spending on three classes of drugs: cancer agents ($18.1 billion), followed by anti-infective agents ($6.6 billion) and immunosuppressants ($6.2 billion) in 2021. According to researchers, blood formulation/coagulation agents constituted $2.5 billion in 340B spending in 2021 which is less than 0.5% of 340B spending that year. See the chart below for the full breakdown.
Last month, the House Ways & Means Committee approved the Preserving Telehealth, Hospital, and Ambulance Access Act (H.R. 8261) which extends COVID-era telehealth waivers in Medicare until 2026 and the Medicare Hospital at Home initiative which allows hospitals to provide acute care to seniors in their homes. Hemophilia Treatment Centers and their patients have greatly benefited from the expansion of telehealth in Medicare as it eases access challenges, especially for those with mobility issues or located far from their medical home.
While the Hemophilia Alliance supports the telehealth provisions of the bill, we were disappointed to see a 340B reporting provision added to the bill as a potential cost-savings measure that could pay for the telehealth extension. The provision added to the telehealth bill includes a requirement that PBMs and their affiliated pharmacies annually report to their prescription drug plan sponsors a list of drugs for which they have contracts with a 340B covered entity.
Congress has had 340B under the microscope the past few months. As this legislation highlights, even apart from major legislative reform proposals, Congress seems interested in incremental policy reforms related to the 340B Program.
The Hemophilia Alliance will continue to monitor this Congress closely, especially during “lame duck” session, following the election later this year as the end of year tends to be a busy and fast legislative period even apart from election years.
Also in this Issue…
Administration and Operations Team Update
· Don’t Miss Out! Navigating Patient Assistance and Copay Assistance Schemes Webinar
· Re-cap of the 1st Annual Hemophilia Alliance Physical Therapy Conference
· Upcoming Meeting Schedules
Member and Community Relations Update
· MCR’s In the Community – MCR Team
Notes from the Community
· VWD Connect Foundation Annual Conference in July: REGISTRATION STILL AVAILABLE!
· Navigating the Future, Together!