Nearly all (97 percent) of all 340B hospitals in a recent survey said they are impacted by drug manufacturers' curbs on contract pharmacy use. | Shutterstock

Survey: Pharma’s 340B Contract Pharmacy Actions are Putting the Squeeze on Hospitals

340B hospitals are under significant pressure due to drug manufacturers ending 340B discounts on drugs dispensed by contract pharmacies, hospital advocacy group 340B Health says in its latest annual member survey.

Nearly 500 hospitals that are members of 340B Health, a trade group representing 340B hospitals, responded to the survey. It found that critical access hospitals (CAHs)—facilities with 25 or fewer beds typically located in highly isolated locations—derive 51 percent of their 340B savings through contract pharmacies, while disproportionate share (DSH) hospitals reported receiving 26 percent of their savings through contract pharmacy arrangements.

Overall, 97 percent of the hospitals surveyed say they are impacted by the curbs on contract pharmacy use, while 62 percent believe they will lose at least 15 percent of their 340B-related savings as the result of the practices of the six drug manufacturers who are restricting 340B discounts. Among CAHs, 59 percent say a program cut could lead to facility closures.

If such practices by drug manufacturers became more widespread, 94 percent of CAHs would have to cut programs and services, while 85 percent of DSH hospitals would have to do the same.

“The evidence is clear. By cutting off access during a pandemic to 340B discounts on drugs dispensed at community pharmacies, drug companies are harming the ability of safety net providers to continue their effective COVID-19 responses and tackle some of the health system’s most prevalent chronic diseases,” said 340B Health President and CEO Maureen Testoni. “The Biden administration must act now to ensure this damage is not permanent.”

That sentiment was echoed by the National Rural Health Association (NRHA), which provided a statement on the survey to 340B Report.

“In the midst of the ongoing COVID-19 pandemic, it is critical that this lifeline program is preserved and emboldened,” noting 453 rural facilities considered to be at-risk have finances similar to the 20 that shut down last year. We need the administration and Congress to work to preserve the integrity of the 340B program.”

Other Findings

Three-quarters of CAHs say they use their 340B discounts to help keep their doors open. About 70 percent of rural hospitals have the critical access designation. Overall, 55 percent of all hospitals surveyed say 340B is vital to ensuring their operation is ongoing.

More than 90 percent of the hospitals surveyed say that 340B helps shore up losses connected to uncompensated care and for increasing access to care for low-income and/or rural patients.

The 340B program is also important from a clinical standpoint, the survey found. Fifty-eight percent of hospitals believe it improved overall clinical outcomes, while 88 percent said it helps improve medication adherence (up from 74 percent in the prior year’s survey), and 80 percent say it reduces readmissions (up from 66 percent in the prior year).

If cuts were made to the 340B program, three-quarters of the hospitals said it would impact their service offerings. The biggest impact would be on oncology care, with 74 percent of hospitals saying it would be affected. Two-thirds say that it would also impact their ability to provide diabetes care. And 39 percent of hospitals say that program cuts would also hurt their COVID-19 response.