Declining Healthcare Affordability for Medically Underserved Populations is Traceable to Revenue-Maximizing Policy Decisions by 340B Hospitals & Pharmacies

WASHINGTON, April 17, 2019 /PRNewswire/ -- Today it is less likely today that a person in poverty and without year-round health insurance is able to afford needed prescription drugs than a similarly situated person ten years ago. In 2009, an impoverished, uninsured person was more than 3.5 times as likely as someone in the general population to miss needed prescriptions due to cost. In 2015, the same patient was almost 5.5 times as likely to be unable to afford their prescriptions as the average person. Over this period, the number of hospitals participating in the 340B drug discount program more than tripled while the number of 340B contract pharmacies went up by more than a dozen-fold.

The increasing inequality in healthcare access for medically underserved communities is directly traceable to the policy decisions of 340B participating entities according to new research from the Center for Regulatory Effectiveness (CRE). Based on federal data, the CRE paper explains the actions that many large healthcare organizations have taken which maximize 340B revenues at the expense of healthcare access and quality.

Compared with patients being cared for by non-340B providers, qualified patients served by pharmacies which obtain pharmaceuticals at steeply discounted 340B prices are prescribed more (and more expensive) drugs, often chemotherapy substances. 340B hospitals charge at least twice as much as non-340B providers for outpatient oncology care. GAO concluded that the financial incentives to 340B hospitals to overprescribe outpatient "drugs raises potential concerns about the appropriateness of the health care provided to Medicare Part B beneficiaries."

340B-derived revenues have helped hospitals reduce competition in outpatient care by financing the takeover of private oncology practices and by putting other competing practices out of business. Since 2008, over 650 private community oncology clinics have closed or aligned with hospital systems.

CRE concludes that misuse of the 340B program has:
1. Increased inequality in the healthcare system. 
2. Changed treatment protocols to maximize per-patient pharmaceutical revenues.
3. Worsened the well-being of impoverished and uninsured patients.

CRE's paper, "Measuring the Effectiveness of the 340B Program" is available on SSRN: https://ssrn.com/abstract=3284078

About the Center for Regulatory Effectiveness:
The Center for Regulatory Effectiveness is a nationally acclaimed regulatory watchdog founded by former officials of the White House Office of Management and Budget. The Center's work to make the regulators more accountable to the public over the last half century has been recognized by credentialed third parties.

SOURCE Center for Regulatory Effectiveness