Practice Matters

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

Friday, June 13, 2014

340B Pricing Takes Another Hit


The 340B drug purchasing program has friends and more friends, but don’t count the Community Oncology Alliance  (COA) among them.


The 340B program allows some hospitals, hospital-owned physician practices and community health centers to buy drugs for much less than most hospitals and independent physician practices can. That seems like a good idea unless you are in the pharmaceutical industry or the Office of Inspector General or an organization that represents oncology practices that do not get 340B pricing.


COA commissioned a report (free registration required), released this week, that says the 340B pricing program has actually increased the cost of cancer care.  The research, conducted by Berkeley Research Group, fuels the argument of those who say 340B pricing prompts hospitals to buy oncology practices so they can make profits on chemotherapy.


The researchers report that at least 120 hospitals with 340B pricing acquired one or more independent oncology practices between 2009 and 2012. Because the cost of cancer care delivered in hospitals is more expensive than in physician-owned practices, the analysts estimate that the Medicare program paid $23 million more and Medicare patients paid $4 million more for cancer care than they would have if those practices had remained independent.


Meanwhile, those who think the 340B program is unfair met this week in Washington to discuss the program. And 340B supporters said that meeting was no fun.