Impact of the 340B Drug Pricing Program on Cancer Care Site and Spending in Medicare

Abstract

Objective: To examine the impact of the 340B drug discount program on the site of cancer drug administration and cancer care spending in Medicare.

Data sources/study setting: 2010-2013 Medicare claims data for a random sample of Medicare Fee-for-Service beneficiaries with cancer.

Study design: We identified the 340B effect using variation in the availability of 340B hospitals across markets. We considered beneficiaries from markets that newly gained a 340B hospital during the study period (new 340B markets) as the treatment group. Beneficiaries in markets with no 340B hospital were the control group. We used a difference-in-differences approach with market fixed effects.

Data collection: Secondary data analysis.

Principal findings: The probability of a patient receiving cancer drug administration in hospital outpatient departments (HOPDs) versus physician offices increased 7.8 percentage points more in new 340B markets than in markets with no 340B hospital. Per-patient spending on other cancer care increased $1,162 more in new 340B markets than in markets with no 340B hospital.

Conclusions: The 340B program shifted the site of cancer drug administration to HOPDs and increased spending on other cancer care. As the program expands, continuing assessment of its impact on service utilization and spending would be needed.

Keywords: 340B program; Medicare Part B drugs; cancer care spending; site of cancer drug administration.

Figure 1

Number of 340B Hospitals and Affiliated Clinics by Year: (A) Number of 340B Hospitals; (B) Number of 340B Hospital‐Affiliated Clinics [Color figure can be viewed at http://wileyonlinelibrary.com]

1. Notes: This figure counts the number of 340B hospitals and affiliated clinics that maintained 340B coverage until the end of each year. *DSH, disproportionate share hospital; ^† CAH, critical access hospitals; ^¥Other, includes children's hospitals, rural referral centers, sole community hospitals, and free‐standing cancer hospitals.

Figure 2

Descriptive Trends in Provider‐Administered Cancer Drugs [Color figure can be viewed at http://wileyonlinelibrary.com]

1. Notes: Data are from beneficiaries in markets (Hospital Referral Region) that had no 340B hospital before the study period; *Among patients who received any provider‐administered cancer drug; treatment group includes beneficiaries from markets that newly gained a 340B hospital during the study period; control group includes beneficiaries in markets with no 340B hospital.