The American Hospital Association (AHA) has pushed back on a JAMA Internal Medicine study suggesting that leading acute care facilities that are 340B covered entities have wide variations in how much they charge insurers for clinician-administered drugs.
That study, by researchers at Brigham and Women’s Hospital and Harvard Medical School, focused on a sampling of the top-rated hospitals by U.S. News and World Report. It concluded that those hospitals’ negotiated prices for drugs ranged from 169% to 344% higher than the standard Medicare payment rate of average sales price (ASP) +6%, while self-pay prices were 149% to 306% higher than the Medicare standard rate. “The gap between pharmaceutical acquisition costs and hospital charges is particularly wide for 340B entities,” the authors noted.
There are no restrictions on how hospitals may use revenue from billing more than what they paid for 340B drugs. Hospital groups say that they submit ample information already to the government and that the money supports their safety net mission. Drug manufacturers and others say more accountability is needed.
AHA Vice President of Policy Research Aaron Wesolowski challenged the JAMA study’s findings in a recent blog post suggesting the research was not placed in proper context.
Wesolowski noted that the sample size for the study—just 17 hospitals—was too small “to draw any sweeping conclusions based on their data.” The authors did not include any data regarding what the hospitals pay to acquire their drugs, he added.
“It is also imperative to point out that it is drug companies alone who set the prices of drugs and enjoy double-digit profits at the expense of patients and the providers who serve them,” Wesolowski noted bluntly.
He also observed that since Medicare and Medicaid rates are lower than the actual cost of care, 340B allows them to make up that shortfall.
“The savings generated through the 340B program allow these hospitals to expand access to prescription drugs and comprehensive health care services to marginalized communities across the country,” he wrote.
And Wesolowoski also noted that along with providing care during the COVID-19 pandemic, hospitals have had to manage a nearly 30% cut in Medicare Part B reimbursement for 340B drugs that was originally imposed by the Trump administration and continued by the Biden administration.
That move has “threatened the important services (hospitals) provide to their communities,” he wrote.