The Berkeley Research Group recently published an updated report that compared sales across federal prescription drug programs, to put the size of the 340B Program into perspective. The study found that in 2022, total 340B program sales reached $54.6 billion, when measured at the discounted 340B price, which is more than double the level of 340B sales compared to five years prior. This growth is likely driven by an increase in participation in the program, hospital and provider consolidation, and expansion of contract pharmacy arrangements.
Just that figure alone does not adequately represent the size of the 340B program as 340B prices were an average of 57% lower than list prices in 2022 and the discounted 340B price for some medicines can be as low as a penny. When expressed in terms of the undiscounted list price or wholesale acquisition cost (WAC), 340B sales reached $126.3 billion in 2022.
According to the report, total outpatient net medicine spending varied across government programs in 2022, with Medicare Part D spending $148.4 billion in 2022 and Medicare Part B spending $43.6 billion. Medicaid spent $43.2 billion and TRICARE/DOD spent $8.3 billion during that same time period. As noted above, the 340B program spent $54.6 billion in 2022, the second largest federal drug program considered.
However, the report goes on to note that despite the large size of the 340B program, the Health Resources & Services Administration (HRSA) Office of Pharmacy Affairs (OPA), which administers the 340B program, had a budget of only $11.2 million in FY 2022, compared to the $772.5 million budgeted for federal administration at CMS. Additionally, the data released by HRSA OPA regarding the 340B program is limited when compared to data provided by CMS for both Medicare Parts B and D as well as TRICARE spending.
When estimating the percentage of total branded outpatient drug sales in the United States in 2022, 340B sales were roughly 18.1% of the total, compared to 17.9% in 2021, 17.3% in 2020, 14.9% in 2019 and 2018, and 11.3% in 2017.
The report concluded that despite the intense growth the 340B program has seen, “comprehensive data on the program remains sparse and program guidance vague.” Further, because of the growth the program has seen, it may result in shifts in the site of care, which may ultimately increase costs for payers and patients alike. Finally, because there is not available data on how much margin each covered entity receives from the 340B program, it is unclear whether the program is targeting the providers that treat the most uninsured and low-income patients.
In a press release regarding the new report, PhRMA notes that “Despite its massive size, 340B has zero reporting requirements and zero patient protections to ensure the program is working as it should. Many hospital participants are not located in medically underserved communities, provide very little charity care and, alarmingly, engage in aggressive debt collection practices.”