Prescription drugs sales at 340B prices were $38.8 billion in 2020, “more than three times the level of 340B sales compared to just five years prior,” new drug industry funded research shows.
Total sales would have been $93.6 billion if drug manufacturers could have charged covered entities wholesale prices instead of 340B ceiling prices, according to the June 30 report by Berkeley Research Group funded by Pharmaceutical Research and Manufacturers of America.
“Even at the discounted 340B price, the 340B program is larger than all other federal drug programs” except for Medicare Part D, the report said. It said 2020 total net spending was $127.4 billion for Part D, $38.5 billion for Medicare Part B, and $32.6 billion for Medicaid.
“As the 340B program has grown, it has come to represent an increasingly large share of branded outpatient drug sales,” the report said. “Nevertheless, comprehensive data on the program remains sparse and program guidance remains vague.”
“This growth in 340B has had unintended consequences and may contribute to shifts in the site of care, which can increase costs to both payers and patients,” BRG said. “Additionally, with no available data on how covered entities use the margin earned from 340B drugs (the difference between reimbursement and the discounted 340B price), the overall benefit of the program to patients is unclear.”
BRG is the parent company of Second Sight Solutions, which operates the 340B ESP service that 16 out of 18 drug manufacturers use to administer restrictions on 340B pricing when entities use contract pharmacies
340B provider groups have raised the question whether it is a conflict of interest for BRG to do such studies for PhRMA while at the same it aids drug manufacturers’ denials of 340B pricing.
Aaron Vandervelde, a BRG Managing Director and the Founder and Business Development Lead of 340B ESP, says there is no conflict. During a recent webinar that 340B Report hosted, he said that BRG’s establishment of Second Sight as a separate stand-alone legal entity “created a clear line of demarcation” between the two and “can help ensure that the claims data we collect is used solely for the purposes outlined in our terms of service.”