For example, 340B entities face increased challenges in a shifting regulatory and enforcement landscape with some drug companies limiting discounts that help hospitals provide care for uninsured patients, services in mental health clinics, and many community health programs. Meanwhile, vertical integration between payers, PBMs, and specialty pharmacies is limiting access to PBM networks, while value-based care contracts and reimbursements for drugs and services continue to decline. Manufacturers are also entering into narrow or exclusive specialty pharmacy networks in order to control reporting and compliance costs.
An Overview of Rising Challenges
An increasing number of drugmakers have imposed or tightened restrictions on 340B discounts when a hospital purchases and dispenses drugs to its patients in a community or specialty pharmacy. These restrictions can have an adverse effect on patient outcomes, and the lost savings have resulted in 20% of 340B hospitals to cut certain health service.[1]
- Manufacturers Limiting Access: As of March 2023, 21 companies have placed these kinds of restrictions on 340B discounts, affecting more than 1,400 hospitals that participate in 340B Health’s pricing program.[2]
- Health System Responses: 340B restrictions could lead to cuts in vital health services and patient support programs, put some facilities at risk of closure, inflict financial losses of anywhere from $2-21M/year, as well as delay access to needed drugs and cause financial hardship that can lead to worse patient outcomes.[3]
- PBM Concentration: With three PBMs currently holding more than 85% market share for prescription benefits coverage, the inability to participate in any one payer can be critical.[4]
- Limited Drug Distribution: There are over 500 LDDs, with over 75% of pharmaceutical manufacturers now choosing to limit the number of pharmacies that can dispense their medications.[5]
- Reduced Network Access: When asked about network access barriers, 80% or more of health systems reported that “pharmaceutical manufacturers refused to engage” whenever the specialty pharmacies attempted to access limited distribution drugs.[6]
- More than 70% of health systems reported that their specialty pharmacy was “frozen out” or blocked by payers.
- Larger specialty pharmacies reported greater success in gaining access from manufacturers and/or payers.
Ready to learn more? Visit our page to learn more about McKesson.
[1]https://www.340bhealth.org/files/Contract_Pharmacy_Survey_Report_March_2023.pdf
[2]https://www.pharmacypracticenews.com/Online-First/Article/02-23/More-Manufacturers-Impose-340B-Contract-PharmacyRestrictions/69397#:~:text=The%20others%2C%20according%20to%20340B,Sanofi%2C%20UCB%20and%20United%20Therapeutics
[3]https://www.340bhealth.org/newsroom/stop340bcuts/#:~:text=Hospitals%20that%20provide%20discounted%20drugs,Worsened%20health%20outcomes%20(41%25)https://www.340bhealth.org/newsroom/stop340bcuts/#:~:text=Hospitals%20that%20provide%20discounted%20drugs,Worsened%20health%20outcomes%20(41%25)https://www.340bhealth.org/newsroom/stop340bcuts/#:~:text=Hospitals%20that%20provide%20discounted%20drugs,Worsened%20health%20outcomes%20(41%25)
[4]https://www.
[5]https://www.drugs.com/
[6]https://www.drugchannels.net/2021/10/fresh-evidence-how-health-systems-steer.html