340B Drug Pricing Program

We interview Professor Sayeh Nikpay of the School of Public Health, University of Minnesota, who shares her insights into the 340B program, its role in the healthcare safety net, implementation challenges, and related legal matters.

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Benjamin Fuller spoke on a panel titled “Navigating 340B Drug Program Litigation.” Panelists discussed the current state of 340B litigation, including related challenges and complexities, as well with potential ways to enhance the program.

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The 340B program allows certain hospitals and clinics to use outpatient drugs purchased at substantial discounts on insured patients, generating profits to fund care. The size of these profits depends on the number of prescriptions filled by participating hospital or clinics’ insured patients that also meet the Health Resources and Services Agency’s definition of an eligible patient. A recent court case has challenged the Agency’s longstanding definition of a patient, resulting in new definition that could significantly expand the size of the program and create conflicts when an insured patient satisfies the new definition for more than one hospital or clinic participating in the program. In this paper, we use Medicare Part D data from 2018 to simulate the proportion of prescription drug fills eligible for 340B discounts and total program spending under both existing and new definitions. We found that the new definition could increase the share of 340B-eligible fills in Medicare Part D by 25%, from 12% of fills to 16%, and that the share of fills subject to a conflict could double, from 1% of fills to 1%-2%. Our results suggest that the new definition could increase covered entities’ 340B profits by roughly a third.

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• “Net Spending and Sources of Growth in the 340B Drug Pricing Program”
• “Exploring the Rapid Growth of 340B Contract Pharmacies Among STD and HIV Clinics in the U.S. Safety Net”
• “Only One Can Win – Medicaid Drug Rebates and 340B Discounts”
• “Estimated Impact of New 340B Patient Definitions on the Size of the 340B Program in Medicare”
• “Impact of 340B Exposure on Treatment Cost of Medicare Patients with Cancer”

• “How Leaky Is the Bucket? Network Effects of 340B Contract Pharmacies”
• “Does 340B Status Affect Pharmacy Demand? Evidence from Medicare Part D Plans”
• “Estimated Impact of New 340B Patient Definitions on the Size of the 340B Program in Medicare”