Sept. 13, 2022– President Biden’s call for a “moonshot” campaign to cut the death rate from cancer by at least 50% over the next 25 years focuses renewed attention on ensuring access to affordable cancer care for patients living with low incomes and those who live in often-underserved rural communities across the country. The 340B drug pricing program plays a vital role in expanding access and cutting costs for these populations in need.
Cancer care is one of the most expensive types of care in the U.S., with the cost of cancer drugs a major factor in the price tag. Prices that drug companies set for new cancer drugs continue to rise. A 2018 report by the President’s Cancer Panel found that most cancer drugs launched between 2009 and 2014 were priced at more than $100,000 per patient for one year of treatment. More recently, some launch prices have exceeded $400,000 for a year of treatment, the panel noted.
Congress created 340B in 1992 to support the health care safety net and enable hospitals, health centers, and clinics serving low-income patients to stretch their limited resources, reach more eligible patients, and provide more comprehensive services. 340B requires drug manufacturers that participate in Medicaid and Medicare Part B to sell outpatient drugs at a discount to eligible safety-net providers. The savings created by those discounts – not taxpayer dollars – go toward care for uninsured and underinsured patients.
340B has been a resounding success, providing care for millions of patients who otherwise might not be able to afford it. In fiscal year 2020, for example, 340B disproportionate share (DSH) hospitals provided 67% of all uncompensated and unreimbursed hospital care provided in the country while representing less than half of all hospitals. These hospitals provide services that many other hospitals do not, including burn and trauma care, HIV/AIDS services, medication management, transportation and translation, and other services that help address many of the social determinants of health for patients and communities.
Caring for Those Most in Need
A 2020 report by Dobson | DaVanzo found that 340B hospitals treated a much higher proportion of low-income and disabled Medicare patients receiving cancer drugs than did non-340B hospitals or community-based physician offices. The report found cancer patients treated with oncology drugs at 340B DSH hospitals were 57% more likely to be dually eligible for Medicare and Medicaid. Those public programs pay significantly below the cost of care.
Many safety-net hospitals use 340B savings to provide free or low-cost drugs and treatment. Many go further to expand access to high-quality cancer care to low-income and rural communities. For example, Chicago’s Mount Sinai Hospital provides patients who are uninsured or living with low incomes the financial aid they need to afford their health care. For Erika Aguero, that meant she could receive the treatment she needed for her breast cancer despite being uninsured and unable to afford her care. Mount Sinai used its 340B savings to provide Erika with a discount card so she paid only $20 for each chemotherapy cycle of care. Today she is in good health and is grateful to the hospital for the care she received.
Other hospitals invest their 340B savings to expand treatment in rural communities. St. Anthony Regional Hospital in Carroll, Iowa, is one such hospital. In 2020, it used 340B savings to open a new regional cancer center to serve the seven predominantly rural communities in its service area with state-of-the-art equipment and personnel to provide top-notch cancer care. St. Anthony’s Director of Pharmacy Erin Monthei explains in a video profile that the center’s opening was a turning point for cancer care. “We have patients traveling up to 70 miles for treatment,” Erin said. “For these patients, that is a huge deal. We’re going from an overnight trip to a larger city to now a day trip where they can be closer to their home, their support system, and their loved ones.”
By delivering on its promise of securing a health care safety net for patients most in need, 340B will continue to play a key role in achieving the important goals laid out by our national leaders. That provides another reason to celebrate 340B’s 30th anniversary.