Study Suggests 340B Drug Pricing Program Discourages Biosimilar Adoption in Hospitals
Recent research published in Health Affairs indicates that hospitals participating in the federal 340B Drug Pricing Program are less inclined to prescribe biosimilars in favor of their more expensive biologic counterparts. The study’s findings suggest that reforms may be needed to align the 340B program with the broader aim of promoting cost-effective healthcare.
HCN Medical Memo
The findings of this study should prompt a careful reevaluation of medication choices within 340B-eligible hospitals. Although the program’s intent is noble—supporting safety-net hospitals—it may inadvertently be influencing prescription practices to favor more expensive biologics over biosimilars. This can affect patient costs and broader healthcare spending. Physicians should be part of the conversation in proposing reforms that better align the 340B program with the overarching goals of providing cost-effective, quality care.
- Health economists discovered that 340B program participation led to a 22.9% decrease in biosimilar adoption compared to hospitals just short of eligibility.
- 340B-eligible hospitals reported an average of 13.3 more biologic administrations annually per hospital, generating an additional $17,919 in biologic revenue.
- Dr. Amelia Bond, a study co-author, expressed surprise at the substantial disparity in biosimilar adoption between 340B and non-340B hospitals.
- Rob Nahoopii, PharmD, pointed out limitations in the study design, noting that certain types of hospitals and nuanced practices were not accounted for in the study.
- Eligibility for the 340B program is determined by various factors including the hospital’s DSH percentage, which considers admissions of low-income patients among other criteria.
- Hospitals just below the eligibility threshold had fewer drug administrations and received less Medicare reimbursement compared to those participating in the program.
- Angela De Ianni, RPh, MBA, argued that other factors, such as manufacturer strategies and reimbursement challenges, also influence the slow adoption of biosimilars, not just 340B program participation.
“Most hospitals were in a predicament. They needed a significant percent of doctors to agree to move to the biosimilar product so the percentage of the reference product was low, because the cost of the product went up astronomically as soon as the market share dipped below the requirement. Some hospitals were forced to continue using the reference product as the only way to get preferential pricing.”
– Angela De Ianni, RPh, MBA, Senior Director at Visante
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