Expansion of the Medicare 340B Payment Program: Hospital Participation, Prescribing Patterns and Reimbursement, and Legal Challenges

Trends in Integration Between Physician Organizations and Pharmacies for Self-Administered Drugs

Importance

Increasing integration across medical services may have important implications for health care quality and spending. One major but poorly understood dimension of integration is between physician organizations and pharmacies for self-administered drugs or in-house pharmacies.

Objective

To describe trends in the use of in-house pharmacies, associated physician organization characteristics, and associated drug prices.

Design, Setting, and Participants

A cross-sectional study was conducted from calendar years 2011 to 2019. Participants included 20% of beneficiaries enrolled in fee-for-service Medicare Parts A, B, and D. Data analysis was performed from September 15, 2020, to December 20, 2023.

Exposures

Prescriptions filled by in-house pharmacies.

Main Outcomes and Measures

The share of Medicare Part D spending filled by in-house pharmacies by drug class, costliness, and specialty was evaluated. Growth in the number of physician organizations and physicians in organizations with in-house pharmacies was measured in 5 specialties: medical oncology, urology, infectious disease, gastroenterology, and rheumatology. Characteristics of physician organizations with in-house pharmacies and drug prices at in-house vs other pharmacies are described.

Results

Among 8 020 652 patients (median age, 72 [IQR, 66-81] years; 4 570 114 [57.0%] women), there was substantial growth in the share of Medicare Part D spending on high-cost drugs filled at in-house pharmacies from 2011 to 2019, including oral anticancer treatments (from 10% to 34%), antivirals (from 12% to 20%), and immunosuppressants (from 2% to 9%). By 2019, 63% of medical oncologists, 20% of urologists, 29% of infectious disease specialists, 21% of gastroenterologists, and 22% of rheumatologists were in organizations with specialty-relevant in-house pharmacies. Larger organizations had a greater likelihood of having an in-house pharmacy (0.75 percentage point increase [95% CI, 0.56-0.94] per each additional physician), as did organizations owning hospitals enrolled in the 340B Drug Discount Program (10.91 percentage point increased likelihood [95% CI, 6.33-15.48]). Point-of-sale prices for high-cost drugs were 1.76% [95% CI, 1.66%-1.87%] lower at in-house vs other pharmacies.

Conclusions and Relevance

In this cross-sectional study of physician organization-operated pharmacies, in-house pharmacies were increasingly used from 2011 to 2019, especially for high-cost drugs, potentially associated with organizations' financial incentives. In-house pharmacies offered high-cost drugs at lower prices, in contrast to findings of integration in other contexts, but their growth highlights a need to understand implications for patient care.

Access To Oncology Services In Rural Areas: Influence Of The 340B Drug Pricing Program

Rural-urban cancer disparities, including greater mortality rates, are partially attributable to the limited availability of oncology services in rural communities. Without these services, rural residents may experience delays in timely treatment and may be less likely to complete recommended care. The 340B Drug Pricing Program allows eligible not-for-profit and public hospitals to purchase covered outpatient drugs, including high-cost oncology drugs, at discounted prices. Using 2011-20 data, we evaluated the relationship between new enrollment in the 340B program and oncology services initiation in rural general acute care hospitals that lacked oncology services in 2011. Compared with hospitals that remained unenrolled in the 340B program through 2020, hospitals that enrolled during 2012-18 were 8.3 percentage points more likely to have added oncology services as of 2020. The newly participating hospitals that added oncology services were disproportionately located in Medicaid expansion states and in counties with lower uninsurance rates. These findings suggest that the 340B program facilitates expanded access to oncology services in some rural communities, but opportunities remain to address disparities in the most disadvantaged service areas.