The 340B Drug Pricing Program experienced a significant surge in 2023, with discounted purchases soaring to $66 billion. This 24% year-over-year growth highlights the program’s expanding role in the healthcare sector, yet the underlying causes of this boom remain a topic of debate among stakeholders.
Utilization Tops Growth Drivers
Recent research challenges prevailing assumptions about the sources of the 340B program’s expansion. Contrary to critics who attribute growth to manufacturer price hikes, the study reveals that increased utilization by hospitals is the primary factor. Utilizing a comprehensive analysis of over 28,000 National Drug Code drugs from 2018 to 2024, the findings indicate that usage rates account for nearly 80% of growth based on list prices and almost 100% when considering discounted prices.
Top Drugs and Price Increases Confirm Findings
The study further examines the impact on the top 10 drugs reported by HRSA and those experiencing price increases above inflation. In both categories, higher utilization rates emerged as the dominant contributor to the program’s growth. These insights suggest that hospitals are leveraging the 340B program more extensively, rather than responding to rising drug prices.
- Hospital utilization drives nearly all growth in discounted drug purchases.
- Manufacturer price increases play a minimal role in the program’s expansion.
- The top 10 HRSA-reported drugs are primarily growing due to higher usage rates.
- Drugs with prices rising above inflation are seeing growth mainly from increased utilization.
These conclusions present a shift in understanding the dynamics of the 340B program. Policymakers might need to reassess strategies to ensure the program’s sustainability and effectiveness, considering that utilization patterns are the key drivers of growth.
Stakeholders within the healthcare industry should take note of these findings, as they highlight the importance of monitoring hospital purchasing behaviors. Additionally, the emphasis on utilization over pricing could influence future regulatory measures and negotiations between drug manufacturers and healthcare providers.
Understanding that increased drug usage by hospitals is the main factor behind the 340B program’s growth offers valuable insights for both administrators and policymakers. By focusing on utilization trends, stakeholders can better address the challenges and opportunities presented by the expanding scope of the 340B program, ensuring that it continues to serve its intended purpose of providing affordable medications to vulnerable populations.
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