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PURPOSE: The 340B Drug Pricing Program was established in 1992 for covered entities to stretch Federal resources and provide eligible patients with comprehensive services. Pediatric hospitals were recognized as eligible for the 340B program in 2006. There are limited reports on expanding access to pharmacy services and the value of cost savings and patient benefit. Addressing all three measures of the IHI Triple Aim, the primary objective of this study was to develop, operationalize, and implement the acceptance of commercial payers for pharmacy services in a pediatric outpatient same-day surgery (SDS) unit through bedside delivery and counseling services, and to evaluate the related cost savings from the 340B Program. METHODS: This retrospective, descriptive study is approved by the Institutional Review Board. Patients receiving care within the outpatient same-day surgery unit that were discharged with prescriptions were eligible for inclusion. Reports for all outpatient prescriptions written from same-day surgery and for all outpatient units were collected for a period of 3 months before and after implementation. Reports included prescribed medications, dose, quantity, mode of transmission, and prescription count for those captured by the pharmacy. Data was aggregated to determine prescription capture rate and pharmacy workload. For same-day surgery prescriptions captured by the pharmacy, 340B product pricing was compared to Wholesale Acquisition Cost (WAC) pricing in order to determine the primary outcome of overall cost savings from insurance expansion. Reimbursement data from adjudicated prescriptions was averaged and applied in determining margin for each drug purchased. For secondary outcomes, patient benefit was assessed by administration of a pre-/post- questionnaire to caregivers during their visit. Drug pricing for captured prescriptions was compared to contract pricing using the same data set for a non-340B covered entity within the organization to appraise the value of cost savings through field comparison. RESULTS: The monthly prescription capture rate in SDS increased from 1% to 64% (p
In 1992, Congress created the 340B Drug Pricing Program that requires drug manufacturers to provide outpatient drugs to participating hospitals with substantial discounts. Although the intent of the program is to allow covered entities to increase access to care for more vulnerable patients, hospitals are not required by law to pass on the discounts. Therefore, a concern is that hospitals might over-prescribe. This dissertation includes three chapters to study the effects of the 340B program on hospitals’ behavior changes: Chapter 1 uses state aggregate hospital service spending data from the Centers for Medicare and Medicaid Services (CMS) to study the nation-wide impact of state 340B hospital participation on state hospital service spending. Controlling for state fixed effects, time fixed effects and state specific time trends, I find, on average, a 1 percentage point increase in state 340B hospital share leads to a 12.8% increase in state hospital service spending per capita. With only hospital spending data, analysis in this chapter cannot distinguish between a scenario where hospitals increase their spending to improve quality of care, consistent with the intent of the 340B program, and a scenario where hospitals are simply increasing spending without improving quality to maximize profit. Chapter 2 complements the analysis in Chapter 1 by exploring the causal impact of the 340B program on hospitals' medication cost, patient mix and quality of care. Working with 15 million ambulatory visits to Florida hospitals from 2005 to 2015, I use a series of difference-in-difference (DID) and synthetic control methods (SCM) based on the 2010 340B eligibility expansion, I find an average increase of $111.35 in medication cost per visit due to the 2010 expansion. Quantile regressions reveal that hospitals with the highest proportion of charity care and uninsured patients keep medication cost low and on the most expensive visits, they significantly reduce medication cost for patients. The remaining newly eligible hospitals significantly raise medication cost after the expansion. The increase becomes larger the more expensive the treatment is. Finally, I find some indications that newly eligible hospitals increased Medicaid patient mix and improved quality of care, but the evidence is not strong enough to be conclusive. Chapter 3 further extends the analysis by examining the impact of market power on 340B hospitals' behavior changes. Using the CMS nation-wide state aggregate data, I find the positive relationship between the state's 340B hospital share and state aggregate hospital service spending is stronger when hospitals' market share is higher. Working with the Florida data, using a series difference-in-difference-indifference (DDD) regressions, complemented by DID and SCM estimations, I find the 340B hospitals with low market shares seem to fulfill the mission of the program by keeping medication cost low, treating more low-income patients covered by Medicaid and Medicaid managed care and provide more charity to the communities. Compared to them, hospitals with high market shares significantly raise additional medication cost, treat fewer low-income patients but substantially more commercially insured patients. There are some signs of post-expansion quality improvement among all the newly eligible hospitals, measured by the post-operative adverse reaction rates, but heterogeneity exists in hospitals' length of stay and nonroutine discharge rates. Hospitals with high market shares seem to treat more patients in their own outpatient facilities with a shorter length of stay. While the ones with low market shares experience increased length of stay, possibly due to worse health conditions among the additional Medicaid and Medicaid managed care patients they treat. As a summary, this dissertation finds the average 340B hospital raise their medication cost upon participation in the program, but heterogeneity exists that some of them seem to fulfill the mission of the program. There are signs of quality improvement in the data, but future research could adopt more quality measures to study the cost-effectiveness on the price increase, as well as the welfare influence on the cost reduction.
The Health Resources and Services Admin. (HRSA) oversees the 340B Drug Pricing Program, through which participating drug manufacturers give certain entities within the health care safety net -- known as covered entities (CE) -- access to discounted prices on outpatient drugs. CE include specified fed. grantees and hospitals. The number of CE sites has nearly doubled in the past 10 years to over 16,500. This study examines: (1) the extent to which CE generate 340B revenue, factors that affect revenue generation, and how they use the program; (2) how manufacturers' dist. of drugs at 340B prices affects CE or non-340B providers' access to drugs; and (3) HRSA's oversight of the 340B program. Charts and tables. A print on demand report.
Thanks to remarkable advances in modern health care attributable to science, engineering, and medicine, it is now possible to cure or manage illnesses that were long deemed untreatable. At the same time, however, the United States is facing the vexing challenge of a seemingly uncontrolled rise in the cost of health care. Total medical expenditures are rapidly approaching 20 percent of the gross domestic product and are crowding out other priorities of national importance. The use of increasingly expensive prescription drugs is a significant part of this problem, making the cost of biopharmaceuticals a serious national concern with broad political implications. Especially with the highly visible and very large price increases for prescription drugs that have occurred in recent years, finding a way to make prescription medicinesâ€"and health care at largeâ€"more affordable for everyone has become a socioeconomic imperative. Affordability is a complex function of factors, including not just the prices of the drugs themselves, but also the details of an individual's insurance coverage and the number of medical conditions that an individual or family confronts. Therefore, any solution to the affordability issue will require considering all of these factors together. The current high and increasing costs of prescription drugsâ€"coupled with the broader trends in overall health care costsâ€"is unsustainable to society as a whole. Making Medicines Affordable examines patient access to affordable and effective therapies, with emphasis on drug pricing, inflation in the cost of drugs, and insurance design. This report explores structural and policy factors influencing drug pricing, drug access programs, the emerging role of comparative effectiveness assessments in payment policies, changing finances of medical practice with regard to drug costs and reimbursement, and measures to prevent drug shortages and foster continued innovation in drug development. It makes recommendations for policy actions that could address drug price trends, improve patient access to affordable and effective treatments, and encourage innovations that address significant needs in health care.
"Problem:" Hemophilia is a debilitating, incurable, potentially fatal and catastrophically expensive rare bleeding disorder. Care provided by the US network of 130 regionally organized Hemophilia Treatment Centers (HTC) reduces disorder related mortality, morbidity, and costs. Unfortunately, HTC funding streams and levels have diminished. To generate revenue to meet rising demands, over two-thirds of HTCs operate outpatient pharmacies using federally discounted "340B" prices. However, 340B programs in the HTC setting have never been evaluated. Little is known whether HTC 340B programs are working as intended; about variations and determinants of adoption and implementation; demographic and clinical trends of people enrolled; and patterns of revenue generation and reinvestment per Congressional intent. The objective of this dissertation is to devise a plan to evaluate HTC 340B Discount Drug Pricing programs. The proposed evaluation aims to examine and explain 340B program adoption and implementation patterns within HTC regions; to assess the impact of 340B adoption on HTC financial resources, capacity and services; and to project the implications of potential 340B program loss on HTC functioning. "Methods:" The proposed plan for evaluation uses a mixed methods approach, and is guided by the Consolidated Framework for Implementation Research. The design compares 340B adoption, implementation, and impact over time; and solicits future projections, using the HTC as the chief unit of analysis. Data sources include archival retrieval of federal, state, regional, HTC, and HTC host institution documents; new semi-structured qualitative interviews with stakeholders, and a new organizational survey to assess organizational structure and process influences on 340B adoption and implementation. The evaluation's results should be disseminated through a full report, executive summary, and a brief written for a lay audience. "Summary of findings:" If conducted, the proposed plan for evaluation will provide policymakers and other stakeholders with evidence regarding the adoption, implementation, and impacts of 340B on Hemophilia Treatment Center financial resources, capacity, and services. This evidence will enhance transparency, illuminate organizational and environmental determinants of 340B initiation and dissemination, inform the national 340B debate, and contribute to improved decision making at patient, clinician, and policy levels.
Background: The 340B Drug Discount Program is a federal program enacted by Congress in 1992 that requires participating drug manufacturers to provide discounted prices on covered outpatient drugs to eligible covered entities that serve the country’s indigent and vulnerable patient populations. Although not novel to our health care system, today’s political environment has led to a surge of visibility in the 340B program as it faces Congressional scrutiny that pressures for growth containment, increased program oversight and enforcement by the government and consistency in regulatory compliance. In response to this vigorous regulatory landscape, covered entities are more than ever held accountable for the manner in which they utilize the program. Historically, the 340B program has lacked a metrics-driven reporting framework that captures value of the 340B program to the covered entity, the benefits to the underserved populations from the covered entity with its realized savings, and cost consequences associated with statutory compliance. Objective: The objective of this project is to design and implement a metrics dashboard that supports a macro-evaluation of 340B program effectiveness and integrity for covered entities within a Disproportionate Share Hospital (DSH) eligible health system. Methods: In order to ensure a comprehensive measurement of program effectiveness, a stakeholder needs analysis was completed. The results of this stakeholder analysis were compartmentalized into four domains; cost savings, program maintenance costs, community benefit and compliance. The metrics within each domain would be established based on relevancy, utility, and data availability. Data collection methodology was defined through the creation of a data collection tool, which was validated through a facility application pilot prior to system-wide implementation. Results/Expected Uses: This project resulted in the design and implementation of a dashboard which includes relevant metrics within four domains; cost savings/revenue, program maintenance costs, community benefit and compliance. Primary metrics of each domain are designated through a user interface dashboard gage. The dashboard allows for graphical representation of all other metrics featured in each domain to support quarterly as well as annual trending and evaluation. The dashboard was implemented for all Memorial Hermann Health System 340B facilities and meets the aims of internal benchmarking and macro-evaluation of 340B program effectiveness. Conclusions: The design and implementation of a 340B effectiveness dashboard at a health-system demonstrated that relevant metrics within cost-savings, program maintenance costs, community benefit and compliance related domains provide the covered entity with the tools to evaluate and monitor program effectiveness. There is opportunity to expand the dashboard data collection tool to other 340B hospitals in order to help provide national indicators of 340B utilization. Metrics featured in this dashboard can also be utilized to support 340B advocacy efforts and program justification.
Chapter 1 examines the actions of drug companies in raising prescription drug prices in the United States, as well as the effects of these actions on the Federal and state budgets, and on American families. Chapter 2 addresses frequently asked questions about government and private-sector policies that affect drug prices and availability. Among the prescription drug topics covered are federally funded research and development, regulation of direct-to-consumer advertising, legal restrictions on reimportation, and federal price negotiation. The 340B Drug Pricing Program requires drug manufacturers to sell outpatient drugs at discounted prices to covered entitiesâeligible clinics, hospitals, and othersâin order to have their drugs covered by Medicaid. Covered entities are only allowed to provide 340B drugs to certain eligible patients. Chapter 3 reviews the Health Resources and Services Administration's (HRSA) oversight of the 340B Program to ensure compliance with program rules. In 2017, nearly 60% of U.S. adults aged 18â64 reported being prescribed medication in the past 12 months. Approximately 70% of prescription medications carry out-of-pocket costs. Strategies to reduce prescription drug costs at the individual level are discussed in chapters 4 and 5. Each year, Americans pay more for prescription drugs, and rising drug prices have a disproportionate impact on older Americans. Chapter 6 examines the history of rising drug prices for the brand-name drugs most commonly prescribed for seniors. Generic drugsâcopies of brand-name drugsâlead to significant cost savings. Before a generic drug can be marketed, FDA must approve the generic drug application. According to FDA, applications go through an average of three cycles of review before being approved, which may take years. Chapter 7 examines 1) the first review cycle approval rate of generic drug applications in recent years and factors that may have contributed to whether applications were approved; and 2) changes FDA has made to increase the first review cycle approval rate.