340B Hospital savings by drug company bar chart
340B Health says, "For just the first five of the 21 drug companies for which there is a full year of data post-restrictions, the 340B savings for hospitals decreased by an estimated $1.1 billion from 2020 to 2021."

340B Hospitals Say Pharma’s Contract Pharmacy Policies Are Costing Them “Billions of Dollars”

Hospitals’ 340B savings for the first five of the 21 companies to impose conditions on 340B pricing when providers use contract pharmacies decreased by an estimated $1.1 billion from 2020 to 2021, hospital group 340B Health said in a new report today.

For the five manufacturers—AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, and Sanofi—savings fell by 49% for critical access hospitals and by 26% for all other 340B hospitals, the group said. Twenty-one manufacturers have such policies. “These five drugmakers represent only 22% of the total savings associated with restricted drugs, meaning the current impact for all 21 drugmakers is substantially higher,” 340B Health said.

“A large portion of 340B savings comes from inflationary penalties imposed when drugmakers choose to raise their prices at rates in excess of inflation,” the report said. “Restrictions on contract pharmacy allow these drug companies to circumvent” these penalties.

Contract pharmacy restrictions also allow drug companies to avoid paying 340B discounts on expensive specialty drugs, 340B Health said. “For 12 of the 21 drug companies that have announced restrictions, more than 80% of the savings comes from specialty drugs,” it said.

340B Health said a member survey in November and December 2022 found that nearly one in five have made cuts in programs and services because of the limitations on the contract pharmacy program.

“Most of these drugmakers publicly state they will restore 340B pricing to hospitals that submit claims data, but problems abound with the processes involved,” the group said. “Nearly three-quarters of hospitals overall reported that even when they comply with the manufacturer’s stated data submission rules, their contract pharmacy benefit is not consistently at the dollar level expected in the absence of restrictions. Problems include missing pricing at some pharmacies (88%), pricing dropped without explanation (66%), and unexplained discrepancies across pharmacies in terms of whether the 340B price is available (67%).”

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