In their latest report, the Congressional Budget Office (CBO) examined the purchases of 340B program drugs between 2010 and 2021, highlighting that the program grew by an average of 19% annually. Approximately one third of this growth is due to market-wide trends in prescription drug spending and the other two thirds are due to “the integration of hospitals and off-site clinics, increased facility participation after the implementation of the Affordable Care Act and expanded use of off-site pharmacies.” The 340B Drug Pricing Program requires that drug manufacturers sell outpatient drugs at discounted prices to qualifying health care facilities, allowing these hospitals to reinvest the savings into patient care and hospital operations.  

Below are some of the report’s findings: 

• For 2021, health care facilities participating in the Prime Vendor Program (PVP) spent $43.9 billion on drugs purchased through the 340B program, a steep increase from the $6.6 billion spent in 2010. This growth in purchasing has generated significant savings for hospitals.  

• The 340B program is one of several factors that incentivize the integration of hospitals and off-site clinics.  

• If expanded services at 340B facilities improve patients’ health and patients need less costly care as a result, those expansions could reduce federal costs, but when and by how much is uncertain. 

As a result of this report, many Congressional leaders are calling for tightening 340B restrictions, noting this would decrease overall health care spending. However, much of the savings increase comes from higher-cost drugs, regulatory changes, reductions in insurers negotiated rebates, and changes in the delivery of care. We expect many discussions to reform the 340B program among members of Congress.  

AHPA extends our gratitude to our emerging colleague, Samantha Fragette, guest author of this article. 
Samantha is an undergraduate student in the University of Central Florida’s
School of Global Health Management and Informatics.