New Analysis Finds 340B Medicine Sales Hit Record High in 2017 and Continue to Grow as a Share of Total Drug Spending

WASHINGTON, Aug. 20, 2018 /PRNewswire/ -- How big is the 340B program and what share of the prescription medicine market does it represent? Those are popular questions of late as stakeholders discuss ways to improve the 340B program. In fact, all three Senate HELP Committee hearings this year included a number of questions about the program's true size as policymakers attempt to gain a better understanding of the inner workings of 340B and how it may be impacting the broader prescription medicine market.

To help provide clarity and give perspective on the 340B program's size, Berkeley Research Group (BRG) released a new whitepaper looking at the latest data and found the 340B program accounted for more than 10 percent of total U.S. branded outpatient drug sales in 2017. Perhaps more startling, BRG's analysis notes the 340B program grew 114 percent from 2014 to 2017 and now exceeds Medicare Part B reimbursement for drugs by nearly 20 percent.

There have been a lot of numbers floating around regarding the size of the program – some argue 340B sales are less than 2 percent of annual U.S. drug sales while others say 340B accounted for about 4 percent of drug sales in 2015. So what makes BRG's estimate different? For one, BRG zeroed in on the portion of the pharmaceutical market that is most applicable to the 340B program: branded, outpatient drug sales. Since 340B medicines are specifically for outpatient use, BRG's calculation excludes medicines purchased for use in inpatient settings. Additionally, BRG used an apples-to-apples comparison between the 340B program and the applicable market. Using 2017 data, BRG compared total gross 340B purchases to the total gross market for which 340B purchased medicines are eligible. This is a more accurate calculation than other estimates that compare 340B discounts to total net spend, use outdated numbers or include inpatient medicines which are not 340B eligible. 

The growth of the program on its own may not be alarming, but concerns rise when you pair the growth of the program with data showing patients may not always benefit as intended. Many economists have written about how the program's size could be affecting market prices for prescription medicines. According to an article published in the New England Journal of Medicine, "lawmakers could lower the price of prescription drugs by reforming the federal 340B Drug Pricing Program. […] The scope of the 340B program is currently so vast for drugs that are commonly infused or injected into patients by physicians that their prices are probably driven up for all consumers." Additionally, a different study in the New England Journal of Medicine found that increased revenue derived from participation in the 340B program was not associated with lower mortality or expanded care for low-income patients by 340B-eligible hospitals. Another analysis from Drug Channels found "Nearly all of the billions in 340B discounts have accrued to hospitals. Yet hospitals' charity care has dropped by almost $8 billion amid the 340B program's astounding growth."

An October 2017 report by BRG found this unchecked growth also has a number of negative implications for community oncologists. About a third of all outpatient sales of certain types of cancer treatments are now at 340B hospitals and the increasing use of these medicines at 340B hospitals is tied to a decrease in use of these treatments in physician offices. Independent economists have found 340B growth and this shift in care to more expensive hospitals settings may even be driving up out-of-pocket costs for patients.

Each year, 340B continues to grow, with little to no oversight to ensure the program works as intended. Policymakers must continue to push for reforms to 340B. It is the only way to ensure the program reaches the vulnerable or uninsured patients it was intended to help.

Read the full white paper here and learn more about 340B at PhRMA.org/340B.

Contact:

Nicole Longo

[email protected]

This post originally appeared here: https://catalyst.phrma.org/new-analysis-finds-340b-medicine-sales-hit-record-high-in-2017-and-continue-to-grow-as-a-share-of-total-drug-spending 

SOURCE Pharmaceutical Research and Manufacturers of America (PhRMA)

Related Links

http://www.phrma.org

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