March 23, 2021– Newly released research demonstrates how patients benefit from the 340B drug pricing program in the form of expanded access and improved health outcomes. But there is growing evidence that the actions of six drug companies to cut off 340B discounts for certain drugs is sapping needed resources during the continued COVID-19 pandemic.
340B Health’s annual survey of nearly 500 hospitals participating in 340B shows they all use their savings to benefit patients by increasing access for low-income and rural patients, providing discounted or free drugs to patients who cannot afford them, supporting the delivery of health care for people who are uninsured or underinsured, and expanding the array of vital health services they offer.
The COVID-19 pandemic has created many challenges for safety-net and rural hospitals. Hospitals reported using 340B savings to obtain personal protective equipment and medications for COVID-19 patients. They also used 340B savings to gear up to care for COVID-19 patients including establishing field hospitals, dedicated urgent care sites, drive-through testing sites, specialized infusion units for monoclonal antibodies, and free COVID-19 specific discharge medication programs. 340B savings allowed these hospitals to keep their patients safe by supporting new or expanded telemedicine services, curbside pick-up and home delivery of medication, housing for homeless patients, and the creation of negative pressure rooms to separate COVID-19 from maternity and other non-COVID-19 patients. Many reported 340B savings kept them afloat while services were initially shut down.
Many 340B hospitals described examples of innovative ways they are tailoring the use of their 340B savings to meet community health needs, often going outside the hospital to do so. Some have opened pharmacies in low-income neighborhoods where all the retail chains have left. Some provide resources and medications to school-based clinics. Some fund mobile health screening services for communities that are underserved.
For some of the nation’s smallest, most remote hospitals, 340B drug discounts are what enable them to offer services that are available nowhere else in the vicinity. Savings allow critical access hospitals (CAHs) to support services that otherwise would cost them more money to deliver than they receive in reimbursement. Nearly two-thirds say they would be at risk of closure without those important resources.
The investment of 340B savings helps hospitals improve patient health outcomes. About 86% of surveyed disproportionate share (DSH) hospitals used 340B savings to improve medication adherence among patients, 80% reported reduced hospital readmissions, and 73% cited improved care transitions for patients.
Lost Savings Equal Lost Opportunities
The report makes it clear that 340B drug discounts are working as Congress intended – to enable safety-net hospitals to stretch their scarce resources to treat more patients and offer more comprehensive services. But the data also show that when drug companies unlawfully refuse to provide these discounts, the lost savings mean less benefit to patients in need.
In recent months, six drug makers have unilaterally acted to limit 340B discounts for drugs purchased by 340B hospitals, health centers, and clinics to be delivered in community-based contract pharmacies. These actions have been sharply criticized by more than half the members of the U.S. House of Representatives and by newly confirmed Health and Human Services Secretary Xavier Becerra when he was California Attorney General. 340B Health and our allies continue to press HHS to take action to stop these actions, order reimbursement of lost revenue, and consider imposing fines on the drug companies.
Nearly two-thirds of hospitals reported that they expect to lose more than 15% of their 340B community pharmacy savings through the company actions. If these actions are permitted to stand and more manufacturers take the same route, the harm to safety-net providers will become massive.
If drug company attacks on 340B became more widespread, hospitals report they will be forced to cut programs and services. Three-quarters of DSH hospitals say their oncology services would be at risk, and two-thirds identify diabetes programs as being particularly vulnerable. Nearly 40% of DSH hospitals and more than 50% of CAHs say their pandemic response efforts would suffer from further cuts.
In a public statement, 340B Health President and CEO Maureen Testoni said, “The evidence is clear. By cutting off access during a pandemic to 340B discounts on drugs dispensed at community pharmacies, drug companies are harming the ability of safety-net providers to continue their effective COVID-19 responses and tackle some of the health system’s most prevalent chronic diseases. The Biden administration must act now to ensure this damage is not permanent.”
In Their Own Words
The statistics in the report paint a grim picture of what could happen to the health care safety net if drug maker attacks on 340B persist and expand. When we hear from hospitals in their own words about what is on the line for them, the problem really strikes home.
Hospitals describe financial outlooks that already were bleak even before drug makers unilaterally started cutting 340B discounts. “Even with 340B savings, we are budgeting for a loss this year for a second year in a row,” one hospital tells us. “340B doesn’t make us rich; it helps us maintain the care we provide to the community.”
Others note that decisions by drug makers to cut off 340B funding during a global pandemic is making the situation substantially worse for safety-net hospitals. One hospital reports: “We are the only hospital within 60 miles. Our system is so financially fragile that at the beginning of the pandemic when ancillary services were halted, we had to terminate services to keep our doors open. We cannot withstand another financial blow. We desperately need the savings generated through the 340B program.”