Impact of the 340B Drug Pricing Program on Cancer Care Site and Spending in Medicare

Abstract

Objective To examine the impact of the 340B drug discount program on the site of cancer drug administration and cancer care spending in Medicare. Data Sources/Study Setting 2010–2013 Medicare claims data for a random sample of Medicare Fee‐for‐Service beneficiaries with cancer. Study Design We identified the 340B effect using variation in the availability of 340B hospitals across markets. We considered beneficiaries from markets that newly gained a 340B hospital during the study period (new 340B markets) as the treatment group. Beneficiaries in markets with no 340B hospital were the control group. We used a difference‐in‐differences approach with market fixed effects. Data Collection Secondary data analysis. Principal Findings The probability of a patient receiving cancer drug administration in hospital outpatient departments (HOPDs) versus physician offices increased 7.8 percentage points more in new 340B markets than in markets with no 340B hospital. Per‐patient spending on other cancer care increased $1,162 more in new 340B markets than in markets with no 340B hospital. Conclusions The 340B program shifted the site of cancer drug administration to HOPDs and increased spending on other cancer care. As the program expands, continuing assessment of its impact on service utilization and spending would be needed.

The unintended consequences of the 340B safety‐net drug discount program

“…In other work, authors found the probability of cancer drug administration occurring in hospital outpatient departments (HOPDs) versus physician offices increased 7.8 percentage points more in new 340B markets. That same study found no increase in drug spending for Medicare patients receiving care at a 340B facility, but an increase in Medicare payments for other cancer care of $1162 in markets newly gaining a 340B hospital compared with markets with no 340B hospital (an 8.4 percent increase) …”

“…That same study found no increase in drug spending for Medicare patients receiving care at a 340B facility, but an increase in Medicare payments for other cancer care of $1162 in markets newly gaining a 340B hospital compared with markets with no 340B hospital (an 8.4 percent increase). 22 Overall, MedPAC reported that in the period 2012 to 2017, the volume of outpatient prospective payment system (OPPS) clinic vis- 24 In this case, the hepatitis C treatment was a supply of oral medications dispensed by 340B providers which could then profit from the discount on these high-priced medications.…”

The impact of integration on outpatient chemotherapy use and spending in Medicare

“…Teaching hospitals may have different treatment patterns than nonteaching hospitals due to new knowledge acquired from clinical trials at their sites. Hospitals participating in the federal 340B program, which mandates manufactures to give deep discounts for outpatient drugs, may have different prescribing patterns than non‐340B hospitals due to lower drug acquisition costs and larger payment margins (Health Policy Brief, ; Jung, Xu, & Kalidindi, ). We stratified the sample by the type of hospital that the current oncologist was integrated with and constructed an IV as the initial oncologist's current integration with the same type of hospitals.…”

Relationship between initiation of 340B participation and hospital safety‐net engagement

“…Leveraging the Affordable Care Act's expansion of 340B to several types of non‐DSH hospitals—children's hospitals, critical access hospitals, and standalone cancer hospitals—Alpert et al 40 compare vertical integration of oncology practices between counties that contain newly eligible non‐DSH hospitals to those that do not, before and after 2010. Jung et al 5 use a similar identification strategy to estimate the effect of participating in 340B on where cancer patients received chemotherapy and spending in cancer. They compared outpatient hospital‐affiliated clinics where the 340B discounts apply to community clinics where the discounts do not apply.…”