May 2, 2023 - Health

How a hospital drug discount program hurts biosimilars market

Tina Reed

Illustration of an IV in the spotlight. — Illustration: Aïda Amer/Axios

The 340B Drug Discount Program — which gives hospitals a break on drug purchases from manufacturers — may be slowing the uptake of lower-cost alternatives known as biosimilars, according to a study led by Cornell University.

Why it matters: Biologics made up 43% of U.S. drug spending in 2019 and accounted for 83% of drug spending growth between 2015 and 2019, the authors said.

Between the lines: Hospitals may get large discounts through 340B on drugs administered in outpatient settings, but administration of those drugs is reimbursed by Medicare at the same rate as non-34oB hospitals, the authors note.

That means 340B hospitals may earn higher profits administering certain discounted medications.

The details: Researchers of the study published in Health Affairs looked at data for two high-volume biologic drugs that both have biosimilar competitors: filgrastim, which boosts white blood cells, and infliximab, an immunosuppressive drug.

Their sample included about 56,000 administrations for more than 6,300 patients across outpatient departments at nearly 600 general acute hospitals between 2017 and 2019.
They estimated the adoption of biosimilars for those drugs was about 23 percentage points lower in 340B hospitals compared with non-340B hospitals.

The bottom line: "The 340B program could be a factor that has meaningfully reduced overall biosimilar use in the U.S.," the authors wrote.

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How a hospital drug discount program hurts biosimilars market

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