Hospitals taking part within the 340B Drug Pricing Program, a big federal safety-net program, are financially incentivized to prescribe unique biologic medication to forestall and deal with ailments in lieu of cheaper generic-like options known as biosimilar medicines, in line with a brand new examine by Weill Cornell Medication, NYU Grossman Faculty of Medication and College of Miami investigators.
Biologic medication, that are produced in residing cells, are extra expensive to supply than different varieties of medication as a result of complexity of producing and contribute to vital progress in well being care drug spending.
The study, printed Could 1 in Well being Affairs, investigated whether or not the construction of the 340B Drug Pricing Program inhibits using biosimilar medicines, that are medically equal however not equivalent to unique biologic medication attributable to manufacturing variations.
The 340B program, which incorporates practically one-third of hospitals in america, is meant for hospitals and clinics serving giant numbers of low-income and uninsured sufferers to buy discounted outpatient pharmaceuticals. Medicine bought on the 340B low cost value could be administered to a broad set of sufferers, together with Medicare enrollees, no matter revenue or the flexibility to pay.
The examine examined information from 593 hospitals, roughly half of which have been 340B hospitals, to check the 2 teams of hospitals’ use of biosimilars for 2 high-volume biologic medicines, filgrastim and infliximab. The investigators targeted on the remedy of Medicare sufferers within the outpatient setting. Filgrastim is used to deal with adversarial results of chemotherapy; infliximab is prescribed for autoimmune ailments, together with rheumatoid arthritis, Crohn’s illness, ulcerative colitis, ankylosing spondylitis, plaque psoriasis and psoriatic arthritis.
“The 340B program was related to a 22.9 share level discount in biosimilar medicine use,” mentioned Dr. Amelia Bond, the Walsh McDermott Scholar in Public Well being and assistant professor of inhabitants well being sciences at Weill Cornell Medication, who co-led the examine with Dr. Emma Dean, assistant professor of well being administration and coverage on the College of Miami, and Dr. Sunita Desai, a well being economist on the NYU Grossman Faculty of Medication. On the identical time, there was a 77 % elevated use of biologic medication general in hospitals taking part within the 340B program. Dr. Bond attributed the upper use of biologic medicines in 340B hospitals to producer reductions these hospitals obtain on purchases of medication, which features a assured 22.5 % checklist value low cost and extra reductions when a producer raises costs above inflation.
All biologic medicines on this examine have been eligible to obtain a producer low cost via the 340B program, nonetheless in line with the examine, proof suggests biosimilar medicines obtain a decrease low cost than unique biologic medicines as a result of the biosimilar gross sales value is mostly decrease. For each varieties of medicines, Medicare reimbursement to 340B and non-340B hospitals is identical, however the reimbursement quantity is mostly decrease for biosimilar medicines.
“Monetary incentives on the hospital stage matter,” Dr. Bond mentioned. With a one-year provide of the biologic medicine, infliximab, for example, “the common revenue margin for a non-340B hospital is $1400. For a 340B hospital, it was virtually $10,000,” Dr. Bond mentioned. 340B hospitals will not be required to funnel income from the drug pricing program to sufferers. Sufferers with unique Medicare who’re coated by supplemental Medigap Medicare insurance coverage for pharmaceuticals are nonetheless liable for a 20% coinsurance fee for unique biologic and biosimiliar medicines. As a result of biosimilar medication price much less to develop, they’ll usually price much less for sufferers.
Biologic medicine is driving 80 to 90 % of the expansion in pharmaceutical spending, with only one to 2 % of the inhabitants prescribed a biologic medicine. “To cut back U.S. well being care prices, biosimilar medication will help brings prices down,” Dr. Bond mentioned.
The examine highlights the unintended penalties of laws meant to assist help hospitals that serve low-income sufferers. “Our examine provides to the proof that the 340B program needs to be modified to raised hit its intent,” Dr. Bond mentioned.
To keep away from stifling using these typically lower-cost and clinically equal merchandise, Dr. Bond recommends restructuring the reimbursement for medication bought via the 340B program. “For instance, MedPac proposed one widespread reimbursement, which might incentivize hospitals in this system to buy round for the most affordable choice, whether or not it’s a biosimilar or unique biologic drug,” she mentioned.