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About two thirds (64%) of CAHs and one third (33%) of larger, more urban hospitals say their ability to keep their doors open would be affected if drug company 340B contract pharmacy restrictions become more widespread.

Drug Makers’ 340B Pricing Restrictions Hit Small Rural Hospitals Especially Hard, Survey Shows

Small rural hospitals have lost on average 39% of their 340B contract pharmacy savings due to drug manufacturers’ conditions on 340B pricing while larger, mostly urban hospitals have lost on average 23%, a hospital group’s member survey shows.

The finding comes from 340B Health’s annual member survey. It was conducted from Oct. 7 through Dec. 31, 2021. Five hundred and ten hospitals responded.

The survey report examined the financial effect of manufacturers’ 340B contract pharmacy actions on critical access hospitals (CAHs) and collectively on disproportionate share hospitals (DSH), rural referral centers (RRCs), and sole community hospitals (SCHs). CAHs are small and rural. The others are relatively larger and overall mostly urban.

More than half (52%) of the financial benefit that CAHs derive from being in 340B comes via contract pharmacy, the survey report said. For larger, more urban hospitals the share is 26%.

The median reported annual loss for CAHs due to manufacturers’ contract pharmacy policies was $220,000, with 10% reporting losing $700,000 or more, the survey found. For the larger hospitals, the median reported annual loss was $1 million, with 10% reporting losing $9 million or more.

About two thirds (64%) of CAHs and one third (33%) of larger, more urban hospitals said their ability to keep their doors open would be affected if drug company 340B contract pharmacy restrictions become more widespread, according to the survey report.

Two thirds (66%) of larger, more urban hospitals said they would be less able to provide discounted and/or free drugs if drug company 340B contract pharmacy restrictions become more widespread, according to the report.

Far fewer CAHs (28%) said they would cut back free or reduced-cost drugs.

The survey asked hospitals which types of clinical services would be affected most by additional unspecified cuts to the 340B program. The top answer for larger, more urban hospitals was oncology (75%). The top answer for CAHs was general patient services (67%). More than a third (38%) of CAHs said COVID-19 services would be affected.

The report notes that the survey was done at a time when only eight manufacturers had imposed conditions on 340B pricing when covered entities use contract pharmacies. The number of manufacturers has doubled since then. “The impact presented in this report underestimates the financial impact currently facing 340B providers,” 340B Health said.

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