Association Between New 340B Program Participation and Commercial Insurance Spending on Outpatient Biologic Oncology Drugs

Abstract

Previous studies have found that hospitals participating in the 340B Drug Pricing Program have higher Medicare Part B spending and expansion into affluent neighborhoods. Less is known about the association of 340B participation with spending by commercial insurance, where reimbursements are higher than Medicare. To use the Affordable Care Act expansion of eligibility for the 340B Drug Pricing Program to study the association between participation and spending on outpatient-administered oncological drugs for commercially insured patients. This cohort study included a balanced panel hospital cohort containing new and never 340B program participants between 2007 and 2019; more recent data were not included to avoid the effect of disruptions in care due to the COVID-19 pandemic. Descriptive analyses documented spending trends for patients receiving common outpatient-administered biologics used in cancer treatments (bevacizumab, filgrastim, pegfilgrastim, rituximab, and trastuzumab) at 340B (treated) and non-340B (control) hospitals. A difference-in-differences model assessed changes in episode drug spending. Analyses were conducted between December 2021 and June 2022. New 340B program participation between 2010 and 2016. Total drug episode spending, with control variables including total billed units, drug, calendar-year fixed effects, and hospital fixed effects. Of 95 127 included episodes (56 917 [59.8%] episodes in female patients) across 478 hospitals, patients seen in 340B and non-340B hospitals were similar in sex and drug used, and 340B hospital patients were older than non-340B patients (median [IQR] age for all patients, 61 [51-71] years). New 340B participating hospitals were more likely to be small (<50 beds) and more likely to be in rural settings. In the difference-in-differences analysis, total episode drug spending increased by $4074.69 (95% CI, $1592.84-$6556.70; P = .001) in the year following start of 340B program participation relative to nonparticipants. Heterogeneous group time effects were seen, with earlier participants less likely to have increased episode spending. In this cohort study, new 340B participation was associated with statistically significant higher oncological drug episode spending compared with nonparticipants after changes in 340B inclusion rules in 2010. These findings raise questions about unintended consequences of the 340B program on drug spending from the commercially insured population.