The 340B Drug Pricing Program has driven hospitals to play a greater role in oncology care due to more favorable reimbursement, as evidenced by the fact hospital outpatient facilities saw their average profit margins on Medicare Part B hospital cancer drug reimbursement through the program grow to 49 percent in 2015, according to a study released Tuesday by the Community Oncology Alliance.
For the study, Aaron Vandervelde and Eleanor Blalock of the Berkeley Research Group examined growth of the 340B program, the shift of oncology care to the hospital outpatient setting, and statutory discounts and rebates on cancer drugs.
Here are four findings from the study.
1. Oncology care overall continues to move from the physician office to the hospital outpatient setting. The study found only 23 percent of Medicare Part B chemotherapy drug administration claims took place in the hospital outpatient setting in 2008, compared to nearly 50 percent in 2016.
2. Hospitals participating in the 340B Drug Pricing Program have been a key driver in this shift. These facilities accounted for 38 percent of Medicare Part B hospital oncology drug reimbursement in 2008 but now account for 67 percent, according to the study.
3. Researchers said the average profit margin on cancer drugs purchased by hospitals through the 340B program went from 40 percent in 2010 to 49 percent in 2015. They added this has "created substantial financial incentives for 340B hospitals to expand oncology services, despite overall healthcare costs increasing as a result of this shift in site of care."
4. Between 2010 and 2015, increased 340B purchases of cancer drugs and Medicaid expansion under the ACA tripled the amount of statutory discounts and rebates on drug sales, according to the study. Researchers said this resulted in upward pricing pressure on cancer drugs.
Read the full study here.