340B drug programs serving wealthier communities: study

Healthcare organizations that joined the federal 340B drug discount program after 2004 were more likely than other program participants to serve wealthier communities with higher rates of health insurance, according to a study.

The finding conflicts with the program's purpose of helping healthcare providers deliver better care for low-income or insured patients by receiving discounts on certain medications.

It also should buoy opponents of the program.

Indeed, last week, the Pharmaceutical Research and Manufacturers of America, the industry's trade group, again filed suit to strike down a 2014 rule by the U.S. Health Resources and Services Administration that allows safety net hospitals to obtain discounts when purchasing so-called orphan drugs when using them to treat non-orphan conditions or diseases through the 340B program.

The 2014 rule altered the original statute drafted by Congress, declaring that only orphan drugs designated for a rare disease or condition “and used to treat such rare disease or condition” are exempt from the 340B program, PhRMA contends in its suit.

The 340B program allows certain healthcare providers, such as federally qualified health centers or disproportionate-share hospitals, to receive discounts up to 50% on some outpatient drugs as a way to help those providers stretch their resources.

However, in recent years, lawmakers, pharmaceutical companies and others have questioned whether the savings and revenue generated by the 340B drug program are being used as intended to improve care for those patient populations.

The authors of the study, published last week in the journal Health Affairs, are Rena Conti, assistant professor of health policy and economics at the University of Chicago, and Dr. Peter Bach, director of Memorial Sloan Kettering Cancer Center's Center for Health Policy and Outcomes. Both authors have been critical of the 340B program.

The Safety Net Hospitals for Pharmaceutical Access, a trade group for 340B hospitals, criticized the analysis.

“The fact remains that 340B DSH hospitals support heavy caseloads of Medicaid and low-income Medicare patients—regardless of where their outpatient clinics are located,” the association said in a written statement.

Newer participants—those providers that joined 340B since 2004—serve communities with lower poverty rates and higher income levels than the providers that began participating in 340B before 2004, study authors Conti and Bach found.

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