Drug industry consulting and contract research firm IQVIA reports that prescription drug sales at 340B-discounted prices grew 18.1% year-on-year from 2019 to 2020.
“Astonishingly, this represents an acceleration in 340B growth versus 2019,” the firm said in a March 31 blog post. In September 2020, it reported that 340B sales in 2019 were 17.1% greater than the year before.
“340B sales growth was over four and a half times the overall pharma market growth rate of 4.0%,” IQVIA said in its blog. “Since 2017, 340B sales have grown 76%.”
340B provider groups will likely contest such findings, on the basis of IQVIA’s ties to pharma and the methodology it used.
IQVIA does not report 340B sales in actual dollars, but instead “dollarized using WAC [wholesale acquisition cost] pricing.” Berkeley Research Group (BRG) uses a similar methodology in reports on the size of 340B that it does on behalf of Pharmaceutical Research and Manufacturers of America (PhRMA). BRG says representing 340B drug sales “at a WAC price” properly aligns “the highly discounted pricing in the 340B program with pricing in the broader U.S. market.”
Using a methodology akin to BRG’s, IQVIA said that 340B sales (dollarized using WAC pricing) grew from $58 billion in 2018, to $67 billion in 2019, to $80 billion in 2020.
The U.S. Health Resources and Services Administration, in its budget request to Congress for the current fiscal year, reported that, “In 2018, total sales in the 340B program were approximately $24 billion.” That’s less than half of IQVIA’s dollarized-using-WAC-pricing 340B sales figure for the same year cited in IQVIA’s blog post.
HRSA estimates 340B sales are approximately 5 percent of the total U.S. drug market. In 2018, West Health Center and Pew Charitable Trust researchers estimated that sales under the 340B program in 2015 accounted for 4.2% of undiscounted drug sales and reduced manufacturer revenues by 1.9%.
In its blog post, IQVIA also said:
- For 340B sales, specialty products grew at twice the rate of non-specialty products, 21.6% versus 10.8%, respectively, with IV-administered products growing 12.4%, oral products growing 31.8%, and products administered subcutaneously growing 36.3% year on year in 2020.
- Sales in 340B mail contract pharmacies grew 56% in 2020 year-on-year, two and a half times the growth rate of 340B retail contract pharmacies. “COVID-19 is unlikely to be driving the growth observed in 340B Mail because the growth of non-340B Mail was much smaller,” IQVIA said.
- Sales in 340B contract pharmacies (retail and mail) “grew 35.6% versus 2019, three times the rate of total sales in these same channels. This is alarming for manufacturers because a substantial proportion of contract pharmacy 340B sales involves payer rebates, a scenario called duplicate discounts. For products subject to 340B penny pricing, a duplicate discount means product sold at a loss.”
IQVIA said in a coming blog post “we’ll explore growth drivers of contract pharmacies to understand how contract pharmacy relationships are growing and the impact this has had on the 340B program.”