IMS study shows cancer treatment costs driven up by 340B Drug Pricing Program

The IMS Institute for Healthcare Informatics issued a detailed report titled, “Innovations in Cancer Care and Implications for Health Systems,” and the Alliance for Integrity and Reform of 340B said the report shows that the drug discount program is a driver in the rise in treatment costs for patients with cancer.

According to the Alliance for the Reform of 340B (AIR 340B) — a coalition of patient advocacy groups, clinicians and biopharmaceutical inventors and distributors — the absorption of private oncology practices by large hospitals increases the cost of oncology drugs to patients because hospitals charge more for them. The report showed that “of ten routinely prescribed chemotherapies, the covered cost per dose increased by 189% in the hospital outpatient setting when compared to the oncologist’s office,” and commonly used oncology drugs cost about $134 more per dose when administered in hospitals.

“The IMS report confirms what numerous studies have found: costs increase for patients and insurers as cancer care shifts to hospitals. Cancer is a disease that exacts an emotional and financial toll on people, yet public policy is creating access problems and driving up costs by incentivizing care away from the most accessible, cost-effective setting,” Ted Okon, executive director of the Community Oncology Alliance, said in an AIR 340B press release. “…the 340B program is a critical safety net for at-risk patients but it has to be modified to focus on people, not bottom lines.”

The IMS report said, “Competitive advantages achieved through 340B pricing, in conjunction with the decline of independent oncology practices, suggest a trend toward hospital outpatient drug administration at a substantially elevated cost to payers and increase patient out-of-pocket expenses.”

AIR 340B spokesperson Stephanie Silverman said the 340B program is not living up to expectations.

“Congress envisioned that 340B would be used by true safety net hospitals, but the eagerness of many hospitals to capture additional revenues — without necessarily passing on benefits to uninsured patients — has led to more than 2,000 hospitals taking part in 340B today,” Silverman said.