Panelists at the Academy of Managed Care Pharmacy (AMCP) Nexus meeting highlighted the controversy surrounding the 340B Drug Pricing Program, including how the program has changed operationally over time and gaps in research to understand the extent to which this initiative is working to reduce costs.
The session began with a brief history of the 340B program, summarizing its formation in 1992 as part of the Public Health Service Act. The program requires manufacturers that sell covered outpatient drugs to other entities to charge a price that does not exceed an amount determined by a statutory formula. The average reduction in list price can exceed 50% and varies between drugs.
Institutions eligible to participate in the program include children’s hospitals, critical access hospitals, disproportionate share (DSH) hospitals, freestanding cancer hospitals, rural referral centers and hospitals. single community, as well as some grantees and clinics (e.g., Native Hawaiian health centers). , sexually transmitted disease clinic, tuberculosis clinic).
John M. O’Brien, PharmD, MPH, president and CEO of the National Board of Pharmacy and editorial board member of American Journal of Managed Care. Since then, entities need to have relationships with multiple pharmacies as well as manufacturers, wholesalers, third-party regulators, pharmacy benefit managers, and pharmacy conversion providers, creating a much more complex system and causing controversy over the development of the scheme, certainty and clarity about how it will work, lack of transparency about how it will work and the financial impact on different stakeholders.
DSH accounts for the majority of 340B growth. Although 340B generated $52 billion in savings and revenue last year, an increase of about $42 billion from 2015, DSH accounted for 78% of that growth. However, there are concerns about 340B’s transparency, making it difficult to conduct research for the program.
Donald E. Nichols, PhD, principal, health policy and systems research, Genentech, notes that there is no guidance on how to translate rebates into patient care and qualifying services lawsuit, there are no requirements on how rebates are used and there is no comprehensive understanding of whether the patient benefits portion of the program is working.
A study of patient rebate sharing in the 340B program found that of the 1.4% of 340B-eligible pharmacy claims that used a 340B rebate card, the patient’s out-of-pocket costs were of patients (OOP) decreased by approximately 92%, indicating that point-of-sale discounts may be shared at contract pharmacies but most eligible patients do not directly benefit from the program.
Another study of expanding 340B eligibility found that by adopting a more liberal continuum of care approach, the model estimates 340B branded drug sales could double , and raises questions about the purchase behavior of branded and generic drugs by hospitals and 340B clinics.
Nichols says providers are concerned about providing more charity care, increasing the number and variety of medications, and offering free vaccines. However, empirical evidence has shown that there is mixed evidence on charity care, an increase in drug access services and no increase in total community benefit spending or uncompensated care fee.
He noted that more research is needed to better understand how patients benefit from 340B and whether discounts are being systematically passed on to vulnerable patients through:
- Lower OOP costs
- Patient support programs
- Services for vulnerable patients
- The pursuit of debt is less aggressive
- More consistent care
- Better medication compliance
- Better health outcomes
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