Hospitals classified as 340B institutions are playing an increasingly large role in oncology care, and the rapid growth in the federal 340B program has resulted in big changes in the oncology drug marketplace, according to a recent white paper released by the Community Oncology Alliance.
Hospitals classified as 340B institutions are playing an increasingly large role in oncology care, and the rapid growth in the federal 340B program has resulted in big changes in the oncology drug marketplace, according to a recent white paper released by the Community Oncology Alliance (COA): The Oncology Drug Marketplace: Trends in Discounting and Site of Care, by Aaron Vandervelde and Eleanor Blalock of the Berkeley Research Group LLC.
The report found that the move from the physician’s office to the hospital outpatient setting as the site for oncology care has continued unabated since 2008, with 340B hospitals now playing “an outsized role” in this shift in site of care. “Fueled by profits on oncology drugs purchased at a 340B price, 340B hospitals are expanding oncology services while at the same time increasing costs for patients and payers,” the report concludes, and recent trends indicate no slowdown of program growth will occur in the near future. The average profit margin on oncology drugs purchased by 340B hospitals has grown to 49% in 2015, creating a huge financial incentive for 340B hospitals to expand oncology services and administer higher volumes of cancer drugs purchased at 340B prices.
The 340B Drug Discount Program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations and covered entities at significantly reduced prices. Six categories of hospitals are eligible to participate in the 340B program, 1 of which is cancer hospitals that are exempt from the Medicare prospective payment system.
The analysis is based on Medicare fee-for-service claims (2008 to 2016) and a combination of IMS wholesale acquisition cost sales data and publicly available pricing data (2010 to 1015) to conduct financial analysis of sales, discounts, rebates, and 340B margins on a subset of separately payable oncology drugs that accounted for 85% of total Medicare Part B oncology drug reimbursement in 2015.
Among their findings:
“Absent additional legislative and/or regulatory action, we believe the trends identified in this study will not only continue but potentially accelerate in the coming years,” the authors assert. The continued shift of oncology care to the hospital outpatient setting, combined with increased rates of cancer and rising drug prices, is setting the stage for higher overall costs of oncology care, they conclude.
“340B should be an important safety net for patients in need but it has mutated into a nightmare of increasing costs for seniors, adversely impacting cancer care, and fueling drug prices,” said Ted Okon, executive director of COA. He applauds efforts by US House of Representatives Energy and Commerce Committee to reassess the 340B program, and CMS for taking steps to address abuses. “Congress must legislate program transparency and accountability to ensure that 340B savings help patients in need.”
Budget Impact Analysis of Biosimilar Natalizumab in the US
Projected savings from biosimilar natalizumab were $452,611 over 3 years, driven by decreased drug acquisition costs and a utilization shift from reference to biosimilar natalizumab.
Biosimilars in America: Overcoming Barriers and Maximizing Impact
July 21st 2024Join us as we explore the complexities of the US biosimilars market, discussing legislative influences, payer and provider adoption factors, and strategies to overcome industry challenges with expert insights from Kyle Noonan, PharmD, MS, value & access strategy manager at Cencora.
Biosimilars Oncology Roundup for June 2024—Podcast Edition
July 7th 2024On this episode of Not So Different, we review biosimilar news coming out of June, with clinical trial results from conferences and a study showcasing how to overcome economic and noneconomic barriers to oncology biosimilars.
Hesitancy in MENA Nations to Adopt WHO Biosimilar Guidelines Hinders Market Development
July 17th 2024The World Health Organization’s (WHO) new guidelines for biosimilar approvals aim to save time and money for manufacturers in the Middle East and North Africa (MENA), but hesitancy among nations to adopt the guidelines is stifling market development of biosimilars.
BioRationality: Time to Get Rid of PBMs if Biosimilars Are to Succeed
July 15th 2024Sarfaraz K. Niazi, PhD, discusses the challenges with pharmacy benefit managers (PBMs) that plague the biosimilar industry and new legislation that attempts to reform their practices and encourage biosimilar adoption.