Community Oncologists Challenge 340B Program
Community oncology groups are pushing for stricter reporting requirements and reimbursement cuts to hospitals participating in the 340B drug pricing program. This policy battle could have financial implications for outpatient imaging centers that are affiliated with 340B-eligible hospital systems.
- The 340B Drug Pricing Program was created by Congress in 1992 and requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations at a significant discount. The program's intent is to allow these "covered entities," which serve a disproportionate share of low-income and uninsured patients, to "stretch scarce federal resources as far as possible." - Community oncologists argue that the program lacks sufficient oversight, leading to hospitals purchasing discounted drugs and charging payers higher prices, thereby increasing profits rather than passing savings on to patients. One study found that price markups at 340B-eligible hospitals were significantly higher than at independent physician practices. - Hospitals counter that savings from the 340B program are used to provide free or discounted care to uninsured patients, offer free vaccines, and support mental health clinics and other community health programs. In 2022, 340B hospitals provided nearly $100 billion in benefits to their communities. - The number of healthcare providers participating in the 340B program has grown substantially, from about 1,000 in 1992 to over 50,000 by 2021. This growth, particularly among hospitals, has led to increased scrutiny of the program. - A major point of contention is the use of contract pharmacies, which are outside retail pharmacies that dispense 340B drugs on behalf of covered entities. Critics argue this practice expands the program beyond its original intent and leads to a lack of transparency. - Proposed reforms include mandating that hospitals report how they use their 340B savings, including data on patient charity care provided. However, hospital associations have pushed back, calling such requirements "onerous" and "burdensome." - The Centers for Medicare & Medicaid Services (CMS) has previously reduced Medicare Part B drug reimbursements to 340B hospitals, a move that was ultimately overturned by the Supreme Court. However, CMS is pursuing new payment cuts and conducting surveys on hospital drug acquisition costs to inform future reimbursement rates. - The debate has also moved to the state level, with numerous states considering legislation related to the 340B program. Some states have enacted laws to protect 340B contract pharmacies from restrictions by drug manufacturers.
