340B has minimal effect on health spending, study finds

The 340B program has a minimal effect on overall healthcare spending, according to a new analysis by the Medicare Payment Advisory Commission. 

The 340B program was designed to allow certain hospitals to be financially able to treat large populations of patients who rely on Medicare.

The pharmaceutical industry has argued that the program incentivizes hospitals to use more expensive drugs, according to a study funded by the industry's top trade group, the Pharmaceutical Research and Manufacturers of America. 

MedPAC conducted an analysis that compared the average monthly spending on cancer drugs between 340B and non-340B hospitals and physician offices, looking specifically at breast, colorectal, prostate and lung cancer, leukemia and lymphoma. 

It found that for 340B hospitals, spending on cancer drugs was 2 percent to 5 percent higher than hospitals that don't participate in the program and 1 percent to 7 percent higher than physician offices, a modest increase in overall healthcare spending since 2018. 

The spending also depends on the type of cancer. MedPAC found that spending on cancer drugs was only higher among 340B hospitals for prostate and lung cancer. These increases couldn't be definitively linked to incentives from the 340B program and could be due to other factors, MEDPac said.

A survey released last June from 340B Health, a group that represents hospitals that participate in the program, found that 340B saved participating hospitals an average of $11.8 million per hospital per year. 

Find the full analysis here

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