340B hospitals use biosimilar drugs less than other hospitals, which may expose patients to higher out-of-pocket costs, a drug industry funded study concludes.
Pharmaceutical Research and Manufacturers of America released the study last week. Healthcare consulting firm Milliman did the research for PhRMA.
The U.S. Food and Drug Administration approved the first biosimilar drug in 2015 and there were 22 available in the U.S. by mid-2022. Most of them are clinician-administered and covered under a patient’s medical benefit. Because there are so few in the U.S. market, changes in biosimilar utilization are magnified when reported on a percentage basis.
Milliman evaluated four years of commercial drug claims for the study. “For all four years studied, 340B utilization of biosimilar drugs is lower than that of non-340B hospitals,” it said. In 2020, the last year studied, seven biosimilars were approved for use in the U.S. Utilization averaged 30.7% at 340B hospitals versus 38.3% at non-340B hospitals, Milliman said.
“Since 340B providers’ compensation is greater due to the larger margin between the acquisition cost and reimbursement for the drug, they may be incentivized to utilize medicines with a higher price. Therefore, 340B hospitals may choose to continue using reference products over the lower list-priced biosimilars,” Milliman hypothesized.
“Patient out-of-pocket costs would generally be lower if biosimilar utilization was greater,” Milliman said.
The American Hospital Association criticized the findings.
“This latest PhRMA-funded ‘study’ is another attempt to deflect attention away from the skyrocketing drug prices charged by that industry,” AHA Director of Policy Bharath Krishnamurthy said.
“This ‘study’ is not only narrow in scope but also fails to account for a number of factors driving the use of biosimilars at 340B hospitals, including restrictive payer formularies and broader market trends,” Krishnamurthy said. “The fact is that for 30 years, 340B discounts have allowed hospitals to devote more resources to services and programs for the vulnerable communities they serve and increase access to prescription drugs for all their patients.”
