UPDATE Friday, Jan. 28, 2022—This story was updated to include comments by Pharmaceutical Research and Manufacturers of America (PhRMA.)
340B hospitals “are losing significant resources” due to drug companies’ conditions on 340B pricing when covered entities use contract pharmacies, according to a new survey from hospital group 340B Health.
The group said it surveyed its member hospitals in November and December 2021 “to determine the financial impact to date of the drug companies’ actions.” It said 510 hospitals responded.
The survey, which was released this morning, found:
- On average, 340B hospitals that are mostly larger and urban already have lost 23% of their contract pharmacy savings. These include disproportionate share hospitals (DSH), sole community hospitals (SCHs), and rural referral centers (RRCs).
- For critical access hospitals (CAHs), the percentage loss is significantly greater, averaging 39%.
“Annualized dollar losses are substantial,” the survey report says. “For CAHs, the median reported loss is $220,000, and 10% of these hospitals face losses of $700,000 or more. For DSH/RRCs/SCHs, which often are substantially larger, the median reported loss is $1 million, and 10% of these hospitals reported losses of $9 million or more.”
“At the time of the survey, only eight of the 12 drug companies that are limiting 340B pricing had those policies in place, so the losses are expected to grow,” 340B Health said in a news release about its findings.
“These unlawful actions are weakening the health care safety net and pose a threat to patients,” said 340B Health President and CEO Maureen Testoni. “They must stop.”
PhRMA Criticizes Report
Pharmaceutical Research and Manufacturers of America (PhRMA) criticized the survey in a statement to 340B Report yesterday.
“This report appears to be a carefully curated look at a subset of 340B hospitals, not a clear look at how all 340B hospitals use 340B,” the trade association for brand drug manufacturers said. “There are no requirements that hospitals report how they use the savings they generate from 340B, which leaves the government, manufacturers and patients left to take 340B hospitals at their word with no proof points.”
“We have long called on 340B hospitals to support basic transparency and reporting requirements in 340B and, alarmingly, they have refused,” PhRMA said. “We will continue to advocate for changes that put patients back as the focus of this program, not hospitals, clinics or for-profit pharmacies.”