Ballooning 340B market reaches almost 15% of 2021 US pharma sales, IQVIA finds
The tale of a booming federal drug discount program, which pharma companies have sought to curtail, has often been told but rarely with new numbers.
Now, the drug pricing gurus at IQVIA say their latest data shows that the program, known as 340B and once designed to give massive discounts to only a select number of outpatient drugs for only a select few health care providers, has ballooned to $93.6 billion in sales in 2021, which is about 15% of the total $668.3 billion in pharma sales for the year.
What’s more, is that the 340B sales total has nearly doubled in just three years.
The data arrive as at least 16 pharma companies have now reworked their 340B operations over the last several years to work around a rising number of hospitals’ contract pharmacies, even as lawsuits have sought to constrain the firms, some of which have tilted to industry’s favor.
Pharma companies’ restrictions on the program are working, too, as IQVIA found that for 9 of these manufacturers with restrictions in place for some or all of 2021, retail and mail 340B sales fell 32% and 20%, respectively. But for all other pharma manufacturers’ sales, retail and mail 340B sales grew 16% and 44%, respectively.
Another sign the restrictions are working: 340B sales of diabetes drugs declined 7.4% year-on-year in 2021 versus 22% growth seen in 2020.
Complicating the matter further is the fact that insulin juggernaut Eli Lilly defeated in court the Biden administration’s Health Resources and Services Administration, the federal department that runs the 340B program.
The judge, in that case, made clear that Congress may need to act in this situation:
The demand for 340B drugs and the prevalence of contract pharmacies has exploded in a way that Congress likely did not imagine either when the statute was first enacted in 1992.
Still, HRSA continues to go after the pharma manufacturers restricting 340B sales, as it referred to Boehringer Ingelheim’s contract pharmacy changes for monetary penalties, according to a recent letter to the company president.
HRSA said in a statement regarding the overarching legal situation:
We are pleased that two of three recent U.S. District Court opinions involving the 340B Program agree with HRSA that three pharmaceutical manufacturers have unlawfully restricted access to 340B discounted drugs by covered entities that dispense medications through contract pharmacy arrangements – the core finding of HRSA’s May 17, 2021, Violation Letters. HRSA respectfully disagrees with the recent District Court opinion finding that two other manufacturers had not violated the statute, and continues to evaluate its options.