340B Payment Woes Still Abound as Study Points Finger at Drug Companies

A new study says drug companies reduce access to care by limiting 340B community pharmacies.

As 340B payments remain in the spotlight, a new study says drug companies are limiting 340B pricing with community and specialty pharmacies which in turn is having an adverse impact on access to care for patients and communities across the country.

In July, the Supreme Court unanimously ruled that cuts to hospital reimbursement under the 340B drug discount program were unlawful. At the time, the justices said that HHS' failure to survey hospital costs before enacting the cuts exceed the agency's authority under the Medicare statute, making the decision to reduce 340B reimbursement unlawful.

The ruling was the culmination of a court battle stretching back to 2017, when CMS finalized cuts to hospital reimbursement under the 340B program in the 2018 outpatient prospective payment system final rule.

Now, as the dust is finally settling for CMS, a new study by the American Hospital Association (AHA) is pointing the finger at the “unlawful actions” of drug companies.

According to the study, the average 340B critical access hospital (CAH) reported annualized losses of approximately $507,000, and the average disproportionate share hospital reported annualized losses of nearly $3 million.

On average, CAHs reported 44% of their total 340B savings coming from community and specialty pharmacies, with several CAHs reporting that their entire 340B savings come from these arrangements, the AHA study said.

“Overall, 10% of responding hospitals reported average annualized losses of $10 million or more, illustrating the magnitude of the harm that drug companies’ actions have on 340B hospitals and their ability to care for their patients,” the study said.

“This important new report shows how unlawful actions by drug companies to restrict 340B discounts to community and specialty pharmacies are directly reducing access to care and services for patients and communities, especially those in rural areas,” AHA Executive Vice President Stacey Hughes said in a statement.

“Drug companies are limiting discounts that help hospitals provide free care for uninsured patients, services in mental health clinics and many community health programs. To protect access to care, we continue to urge the Department of Health and Human Services to aggressively use all tools available to stop these harmful tactics from drug companies,” Hughes said.

The report is based on a survey of more than 300 hospitals and health systems participating in the 340B program conducted earlier this year by the AHA.