Practice Matters

News from Lola Butcher about health policy and practice management issues of importance to oncologists

Thursday, February 6, 2014

340B = Soak-the-Poor Strategy?

The fast-growing 340B drug purchasing program, which allows some hospitals, hospital-owned physician practices, and community health centers to purchase cancer drugs for far less than independent oncology practices pay, has been getting the squinty eye from its detractors for a while. And the Health & Human Services Office of the Inspector General (OIG) appears to be joining their ranks.


The basic idea behind the 340B program is to allow hospitals that treat a high percentage of uninsured people to buy drugs at deep discounts -- ostensibly to help offset their costs for treating poor patients. The program has grown to include more than 10,000 organizations, and some wonder if poor people are the primary beneficiaries.


In a letter issued this week, the OIG issued its conclusions about the contract pharmacy component of the 340B program. Adam Fein of Drug Channels is an expert in how money works in the pharmaceutical industry, and here’s his top takeaway: Only one-third of the hospitals the OIG reviewed extend their discounted 340B prices to uninsured patients at their contract pharmacies; those patients pay the full price for drugs.


“Where’s the money from this soak-the-poor strategy [going]? No one knows,” Fein writes.


The OIG did not offer any recommendations, but this is the first report of three to be issued this year, so we haven’t heard the end of this.