STUDY DEMONSTRATES ESSENTIAL ROLE OF 340B AMID COVID-19 CHALLENGES AND DRUG COMPANY RESTRICTIONS
WASHINGTON, D.C.— During a year marked by enormous financial pressures on safety-net providers from the COVID-19 pandemic and a growing number of unlawful drug company restrictions on prescription drug discounts, 340B hospitals continued to use their program savings to provide essential services and support that enable patients to lead healthier lives.
An annual 340B Health survey of more than 500 hospitals participating in 340B demonstrates that all used savings they received through federally mandated drug discounts to benefit patients in need in 2021. These services included the provision of uncompensated and unreimbursed care to low-income uninsured and underinsured patients as well as free or low-cost prescription drugs. Hospitals also offered expanded services and launched programs to improve health outcomes. Eighty-nine percent of hospitals reported using 340B savings to improve patient medication adherence, 74% to reduce hospital readmissions, and 61% to improve transitions of care for patients leaving the hospital. For small, mostly rural critical access hospitals (CAHs), 340B was crucial to their ability to continue serving their patients. Nearly three-quarters of CAHs reported they used their savings to keep their doors open during the height of the COVID-19 pandemic.
340B hospitals were on the front lines of the nation’s response to COVID in ways that sharply reduced revenue. Many hospitals needed to invest in personal protective equipment and measures to safeguard the health of patients and caregivers. Hospitals had to limit patient care to emergency cases and close access to other services, including certain diagnostic and surgical care. At the same time, these hospitals treated a significant number of COVID patients, who tended to be older and in poorer health, leading to longer hospital stays. Many younger, healthier patients delayed care.
Meanwhile, a growing group of drug companies imposed restrictions on mandatory discounts to 340B hospitals for drugs dispensed at community and specialty pharmacies. Eight drug companies had implemented 340B pricing restrictions at the time of the survey, and hospitals reported significant financial losses due to those policies. Larger, urban hospitals reported losing an average of 23% of the savings they receive through community and specialty pharmacy partnerships, and the average loss for rural CAHs was 39%. Since the survey ended, the number of companies implementing or announcing 340B price restrictions has doubled to 16, including some of the largest drugmakers in the world. The federal government has found these types of actions to be in violation of the 340B statute.
“The evidence shows that 340B hospitals remain fully committed to their patient missions and to using their 340B savings in service to that mission, even amid a persistent pandemic and worsening attacks on the health care safety net from drug companies,” 340B Health President and CEO Maureen Testoni said. “Hospitals clearly are staying focused on fulfilling the intent of 340B even under great financial duress. What is less clear is how well these hospitals will be able to continue doing so for all those in need as more drug companies refuse to contribute the needed resources to such patient care efforts.”
Read the survey report to see the full data on how 340B hospitals used savings toward patient care in 2021 and see more details on how drug company restrictions affected those savings.
Contact: Richard Sorian at richard.sorian@340bhealth.org or 202-536-2285.