艾昆纬-意想不到的后果：《平价医疗法案》如何帮助推动340B计划的发展

1QVIA

Whitepaper

UnintendedConsequences:

HowtheAffordableCareAct

HelpedGrowthe340BProgram

RORYMARTIN,PHD,IQVIAContract&RevenueManagementCHUANSUN,MS,MA,IQVIAContract&RevenueManagementSHANYUEZENG,MA,IQVIAContract&RevenueManagementKEPLERILLICH,MA,UniversityofCalifornia,Davis

Tableofcontents

Abstract2

Introduction3

Methods5

Limitations7

Findings7

Discussion10

References12

Abouttheauthors14

Acknowledgements14

Abstract

The340BDrugDiscountProgramisalargeandgrowingfederalprogramin

whichmanufacturersprovidediscounteddrugstoqualifyinghospitalsandclinics.

Theprogramwascreatedtoreplacevoluntarydrugdiscountsprovidedbydrug

manufacturerswhichhadbeenlostduetothecreationoftheMedicaidDrugRebateProgramandbestpriceeffects.Thislossthreatenedtodisproportionatelyaffect

individualswhowereuninsuredorlow-incomebutnotcoveredbyMedicaid.Despiteitsimpact,thereisalackofpublishedresearchonwhetherornottheprogram’sscalematchestheneedsofthevulnerablepopulationitserves.

ThisIQVIAstudycomparedthesizeofthe340Bprogrammeasuredusingthenumberofpotential340Bpatientsof340Bhospitalsandclinics(“340Bpatients”)andtheamountof340Bdrugdiscountrevenueversusthenumberofvulnerableindividuals.Theprevalenceof340Bpatientswasestimatedwithanationalsampleofproviders,products,payers,

andpharmaciesusingpharmacyandmedicalclaims,whiletheprevalenceofvulnerableindividualswasestimatedusingafederalsurveyoftheU.S.population.

In2021,25.9%ofindividualsusinghealthcarewerepatientsof340Bhospitalsandclinics.Therewere2.1to3.6timesmore340BpatientsthanvulnerableindividualsintheU.S.

populationusinghealthcare,dependingonwhetherornotMedicaidindividualswereorwerenotincluded,respectively.Thisratioincreasedtobetween3.7and7.7forpatientstakingoneormoreoftheinitial10maximumfairprice(MFP)drugsselectedforMedicaredrugpricenegotiation.From2013to2021,whilethesizeofthevulnerablepopulation

almosthalved,340Bdrugdiscountrevenuegrewby374%,trendsinfluencedinpartbytheimplementationoftheAffordableCareActandwhichhavecontributedtoincentivesthathavemisaligned340Brevenueandthesizeofthevulnerablepopulation.

Individualsusingoneormoreofthe10initialMFPdrugsweretwiceaslikelytobe340B

patientscomparedtothegeneralpopulationofhealthcareusersin2021.Thissuggests

theymaybeshoulderingadisproportionatefinancialburdenofthe340Bprogram,whichiftrue,wouldbeanunintendedconsequenceoftheprogram.

|2

Introduction

In2023,the340BDrugDiscountProgramgenerated$124.1BinsalesbasedonWholesaleAcquisitionCost

(WAC)pricing1or$56.1Bbasedon340Bdiscount

pricing,anincreaseof475.1%in340Bdrugdiscount

revenueversus2013.Theprogramraiseshealthcare

costsforself-insuredemployersandtheirmorethan100Mworkersby$5.2Bayear2because340Bdiscountsdisplacemanufacturerrebates.Andmorethan2,600hospitalswereparticipatingintheprogramasof

January,20233,representing42.5%ofhospitalsintheUnitedStates4.Yetdespitetheprogram’ssizeand

impact,thereisalackofpublishedstudiesexploringwhetherornotitisappropriatelysized.

Determininghowthe340Bprogramshouldbesizedis

challengingbecauseitsscopeisunclear—thevulnerablepopulationitservesisnotwell-definedandtherearenomandatedservicestosupportthem—plus,there’salackoftransparencyastohoworevenif340Bdrugdiscountrevenueisusedtosupportvulnerableindividuals.

Thisstudyestimatedthesizeofthe340Bprogramusingthenumberofpatientsof340Bhospitalsandclinicsandcomparedittothesizeofthevulnerablepopulation,

definedasindividualswhowereeitheruninsuredorlivinginpovertybutnotcoveredbyMedicaid.Theprogram

wasalsosizedusingtrendsin340Brevenuecomparedtotrendsinthesizeofthevulnerablepopulation.

The340Bprogramasacontract

Tohelpunderstandthechallengesinsizingthe340B

program,consideritasacontractinwhichhealthcare

servicesforvulnerableindividualsaredeliveredby340Bhospitalsandclinicsandpaidforbymanufacturers,and,duetoincreaseddrugcostsfromdisplacedrebates,by

employers,payers,andpatients.Althoughtheservice

providersreceivingpaymentarethe340Bhospitals

andclinics,theydonotsignanagreementwiththe

manufacturers.Viewedthroughthislens,thereare

multiplepotentialissuesasillustratedinFigure1(page4).

1.Scope:Thescopeoftheservicesisnotclearlydefined,includingtheservicestobeprovidedandwhich

individualsreceivethem.

2.Mandatedservices:Thereisnomandateforservicestobeprovidedtovulnerableindividuals,andno

penaltiesfornon-performance.

3.Paymentterms:Thesizeofthepaymentisn’talignedwiththescopeoftheservices.Forexample,ifthe

adjustmentpercentageofthedisproportionatesharehospital(DSH)increasesfromthe11.75%thresholdto80%,itdoesn’treceiveanyadditional340Brevenue5.Also,340Brevenueispaidtohospitalsandclinics

whetherornotservicesaredelivered.

4.Transparency:Hospitalsarenotrequiredtoreporthow340Brevenuewasused.

5.Contractenforcementanddisputeresolution:Thecontractprovisionsofdiversionandduplicatediscountsarenotenforced,orareenforcedinsuchalimitedwaybytheHealthResourcesandServicesAdministration

(HRSA)astobeineffective.Andithastakenmorethan

10yearsforthe340BAdministrativeDisputeResolution(ADR)processtobeestablished,inpartbecauseearlierversionswerecriticizedforbeingoverly-complex6.

Also,programguidancegeneratedbytheprogram’sadministrator,HRSA,isnotlegallybinding7.

3|UnintendedConsequences:HowtheAffordableCareActHelpedGrowthe340BProgram

Figure1.The340Bprogramframedasaservicecontractinwhich340Bhospitalsandclinicsarepaidtoprovideservicestothevulnerablepopulation.

Scope

•Services,patienttypes,andthenumberofpatientsareallunclear

1

340B2•Nomandateforservicestobeprovided,nopenaltyfornon-performance

Mandatedservices

Paymentterms

3•Paymentamountnotalignedwithscopeofservices

•Providerspaidwhetherornottheydeliver

Transparency

4•Hospitalsarenotrequiredtoreporthow340Brevenuewasused

Contractenforcementanddisputeresolution

5

•Thecontractprovisionsofdiversionandduplicatediscountsarenotenforced

•340BADRiscomplexandineffective;HRSA'sguidanceisnotlegallybinding

340BversusMedicaidDrugRebateProgram

The340Bprogramoperatesquitedifferentlyversusanotherfederaldrugprogram—theMedicaidDrugDiscount

Program(MDRP)—asillustratedinFigure2(page5).

MDRPrequiresmanufacturerstoproviderebatesto

stateMedicaidprogramsforoutpatientdrugstoreducedrugcosts,andrebatesarepaidonclaimsgeneratedbyMedicaidpatients.Incomparison,340Bhospitalsandclinicsusealloftheirpatientstogenerate340Bdiscountrevenue,includingindividualswithhealthinsurance.

InMDRP,patienteligibilityisdefinedbyfederalandstateguidelines.For340B,patienteligibilitywasn’tdefinedinthe1992statute,andalthoughguidanceknownasthePatientDefinitionwasissuedbyHRSAin1996toaddressthis8,ithasbeensubjecttolitigationandproviders

havebeenmakinguptheirownrules9andattemptsatgovernmentenforcementhavebeenunsuccessful.For

MDRP,rebatedollarsareproportionaltothenumberofMedicaidpatientstreatedandthevolumeofdrugsused,

whereasforthe340Bprogramrevenueisproportionaltothetotalnumberofpatientsofthe340Bprovider,regardlessofpatientincomeorinsurancestatus.

TherelationshipbetweenDSHpercentageand340Brevenue

Disproportionatesharehospitalsprovidecarefor

vulnerablepopulationsandqualifyforthe340BprogrambasedonhowmuchcaretheyprovidetoMedicaid

andlow-incomeMedicarepatients.Specifically,they

musthaveaDSHadjustmentpercentagethatmeets

orexceedstheminimum11.75%requirementsetby

HRSA10.AlthoughtheDSHadjustmentpercentageplaysanimportantroledeterminingthesizeofthe340B

program,itwasnotdesignedspecificallyforthe340Bprogram.Itwascreatedtoadjusthospitals’Medicarepaymentstoaccountfortheadditionalcostsassociatedwithcaringforlow-incomepatients,andbecame

effectiveonorafterMay1,198610,beforethe340B

programwascreatedin1992.Presumably,thismetricwasre-usedfor340Btohelpeasetheadministrativeburdenoftheprogram.

|4

AnunintendedconsequenceofusingaDSHthresholdtodeterminewhetherornothospitalsqualifyas340Bisthatthehospital’s340Brevenuebecomesinverselyproportionaltoitspercentageofvulnerablepatients.Specifically,340Bprovidersuseinsuredpatientsto

cross-subsidizevulnerablepatients,manyofwhomareuninsured,andonceahospitalhasqualifiedfor340B

byexceedingtheDSHpercentagethemorevulnerablepatientsithas,thelessitsabilitytogenerate340B

revenue.Thisistheoppositeofhowcharitycareshouldbefundedandcreatesperverseincentivesinwhich340Bhospitalsmaximizetheir340Bdrugdiscountrevenue

bystrategicacquisitionstomeetwithoutexceedingthethreshold5,11.

Figure2.ComparisonoftheMedicaidDrugRebateProgram(MDRP)versusthe340Bprogram.

Discounts

Usesallpatientsofentities,includingtheinsured.

Eligibility

Notwell-defined.

Providersmakeupownrules.

Proportionality

340Brevenuepotentialisproportionaltothetotal numberofpatientsatcoveredentities.

340B

Discounts

RebatesarepaidonclaimsgeneratedbyMedicaidpatients.

Eligibility

MDRP

Definedbyfederalandstateguidelines.

Proportionality

Rebatedollarsare

proportionaltothenumberofMedicaid

patientstreatedandthevolumeofdrugsused.

Methods

Vulnerablepopulation

Westudiedtwogroupsofvulnerableindividualsforthisstudy:thosewhowereuninsuredorlow-incomeand

notcoveredbyMedicaid,andallindividualswhowere

uninsuredorlow-income.Thefirstgroupwasthereasonthe340Bprogramwascreated.

Halfadozennationalsurveysexistthatreportthe

prevalenceoftheuninsuredandthoselivinginpoverty.Theydifferintermsoftheirestimatesofthesizeof

thevulnerablepopulation,whichisthoughttobe

duetodifferencesinsurveyfocus,size,recallperiod,howrespondentsareaskedquestions,andwhetherestimatesarepoint-in-timeorforafullyear.Areview

discussingsimilaritiesanddifferencesisavailable12.

ThecurrentanalysisstudiedthevulnerablepopulationusingtheMedicalExpenditurePanelSurvey(MEPS)13

whichisanannualhealthcaresurveyconductedbytheAgencyforHealthcareResearchandQuality.Itallowsforthecombinationofcriteriaandwasusedtoestimatetheprevalenceofpovertyandbeinguninsured.Itreports

thenumberofindividualswholackinsuranceforawholeyearbycombiningmultiplepoint-in-timeestimates

duringtheyear.

EstimatesoftheU.S.populationusedtoexpressthe

Medicaidpopulationasapercentageofthetotal

populationwerebasedonreportsfromtheU.S.CensusBureau14.

5|UnintendedConsequences:HowtheAffordableCareActHelpedGrowthe340BProgram

Measuresof340Bsize

Twomeasureswereusedforthesizeofthe340B

program:thenumberof340Bpatientsandtotal340B

drugdiscountrevenue.Theformeristhenumberof

individualswhoarepatientsof340Bhospitalsandclinicsandwhopotentiallycanbeusedby340Bproviders

togenerate340Brevenue,whilethelatteristhedrugdiscountrevenuegeneratedby340Bproviders.

340Brevenue

340Bdrugdiscountrevenuewasestimatedasthe

differencebetween340BsalesdollarizedatWACand

atinvoiceprice,theacquisitioncost.Thisapproachmayunder-estimate340Brevenuegeneratedfromphysician-administeredproductsifhospitalmarkupsareinuse15.

Currentpracticeisthatthe340Bdiscountisreflectedintheinvoicepriceforthe340Bhospitalorclinic.SaleswereestimatedusingIQVIA’sDrugDistributionData(DDD)

subnationalsalesdatabasewhichcapturesalltypesof

products:self-administeredandphysician-administered,brandsandgenerics,andtraditionalversusbiologic.

340Bpopulation

Thenumberof340BpatientsintheU.S.wasestimated

usinganationalsampleofproviders,products,payers,

andpharmaciesspanningpharmacyandmedicalclaimsinIQVIA’sLongitudinalAccessandAdjudicationDataset

(LAAD).Individualswereidentifiedaspatientsofa340Bhospitalorcliniciftheymetoneorbothoftwoconditions:

1.Theindividualhadamedicalclaiminwhichthebillingproviderwasa340Bhospitalorclinic,or

2.Theindividualhadapharmacyclaimwrittenbyaphysicianworkingata340Bhospitalorclinic

Anyoneofthreescenarioscouldtriggercondition(2):thepharmacyclaimcontaineda340Bmodifier16,theprescriptionwasfilledatanentity-ownedpharmacy,ortheprescriptionwasestimatedtobewrittenata340Bhospitalorclinicusingtheprocessbelow.

Pharmacyclaimsdonotcapturefacilityinformationandphysicianscanworkatmultiplefacilities,whichintroducesuncertaintyastowhereprescriptionsarewrittenandtheir

340Bstatus.Toaddressthisuncertaintyweusedmedicalclaimsforeachphysiciantodeterminethefacilitiesat

whichtheyworkandtheirrelativeworkloadateachfacility.LAADmedicalclaimsweresupplementedbytheMedicareStandardAnalyticalFile(SAF)toincreasecaptureofclaims

atinstitutionalproviders.Fortherelativelysmallpercentageofhealthcareproviderssuchassomenursepractitioners

andphysicianassistantswhomaynotgeneratemedical

claims,IQVIAaffiliationdatawasusedasasupplement.Athresholdof80%wasusedforthelikelihoodapharmacyclaimwaswrittenata340Bhospitalorclinic,withvaluesatorabovethethresholdindicatingtheclaimwas340B,andasensitivityanalysiswasusedtoassesstherobustnessoffindingswithrespecttothisfigure.

Conditions(1)and(2)areaclaims-levelinterpretation

ofthe1996patientdefinitionbasedonwherepatient

carewasdelivered.Althoughtheperiodforthepatient-

providermedicalrelationshipwasnotdefinedinthe340Bstatute,commonpracticeistouseaperiodoftwoyearsasdiscussedintheMorfordletter17,althoughsomeprovidersusealongerperiodoraperiodofonly12months.

PatientidentifiersweretokenizedthesamewayinLAADpharmacyclaimsandmedicalclaimswhichallowed

individualstobetrackedacrossthetwoclaimsassetstoavoiddoublecounting340Bpatients.

Factorssuchasproductreimbursementtype(e.g.,pass-through,separatelypayable,etc.),orphandrugstatus,andmembershipofapharmacyintheprovider’s340B

pharmacynetworkwhichareimportanttodeterminethe340Bstatusofadrugwereexcludedbecausetheydonotaffectthe340Bstatusofapatient.

|6

Limitations

Ahandfuloflimitationsapplytothisstudy.Thenumberof340Bpatientswaslikelyunder-estimated:thesamplesusedforpharmacyandmedicalclaimshavelessthan

100%capture,andthe340Bstatusofsomeindividualscouldnotbedeterminedbecauseofuncertaintyin

wheretheirpharmacyclaimswerewritten.Forexample,inthesegmentofindividualswhohavepharmacy

claimswithlikelihoodofbeing340Blessthan80%,itisstatisticallyalmostcertainsomewereinfact340B,buttheywerenotidentifiedassuch.

Itwasassumedallprescriptionsfilledatentity-

ownedpharmacieswerewrittenatthecorrespondingentity.Someentity-ownedpharmaciesallowwalk-inprescriptionswrittenatexternalproviders,butthe

proportionofsuchcasesislow.

Thestudydidnotaccountforunder-insuredindividuals.Individualswereclassifiedasuninsurediftheylacked

insuranceforafullyear.Individualswhowereuninsuredforsmallerperiodsoftimewerenotincluded.

TheMEPSsurveyhasalimitedsamplesizeof25,000-30,000respondentsandduetoitsdesigncannotbeusedtostudymulti-yearperiods.

Ideally,340Brevenuewouldhavebeencomparedtotheamountspentby340Bhospitalsoncharitycare,butthereisnorequirementforhospitalstoreportthisspend18.

Findings

Thenumberofvulnerableindividualswascompared

tothenumberof340Bpatientsusingthesegmentof

theU.S.populationwhousedhealthcareservicesina

givenyear,sincecharitycarecanonlyhelpindividuals

whousehealthcare,and340Bpatientsmusthaveusedhealthcareservices.BasedonMEPSdata,approximately80.0%oftheU.S.populationusedhealthcareservicesin2021,thedateofthemostrecentsurveyreportedatthetimeofpublication.FindingsaresummarizedinFigure3.

In2021,25.9%oftheU.S.populationwasa340Bpatient,7.3%oftheU.S.populationwasuninsuredorlow-incomebutwasnotcoveredbyMedicaid,and12.3%wasuninsuredorlow-incomeandpossiblycoveredbyMedicaid.

Pricenegotiationproducts

Tofurtherunderstandtherelationshipbetween

thepopulationsofvulnerableindividualsand340B

patients,westudiedtheinitial10productschosenforpricenegotiationundertheInflationReductionAct19.Theseproductsarehigh-cost,high-usagedrugsthathaveindicationsforchronicand/orsevereconditions.Theirfrequentusagemakesitpossibletostudythemincombinationwithotherfactorssuchasincomeand

insurancestatusinasurveysuchasMEPS.Also,these

productsareatriskof340B-MedicareFairPriceduplicatediscounts.FindingsareshowninFigure4(page8).

Approximately3.4%oftheU.S.populationtookoneor

moreoftheseproductsin2021.Theprevalenceofbeingvulnerableamongpatientstakingoneormoreofthese

productswas13.7%,includingMedicaidpatients,and6.6%excludingthem.Incomparison,51.1%ofindividualstakingtheseproductswerepatientsof340Bhospitalsorclinics.

VulnerablePopulation

Ratio340B:Vulnerable

WithoutMedicaid

With

Medicaid

355.4%

210.9%

Figure3.Estimatesoftheprevalenceofvulnerableindividualsand340Bpatients.

Segment

%U.S.

population

WithoutMedicaid

With

Medicaid

340Bpatients

Hospital

80.0%

7.3%

12.3%

25.9%

7|UnintendedConsequences:HowtheAffordableCareActHelpedGrowthe340BProgram

VulnerablePopulation

Ratio340B:Vulnerable

WithoutMedicaid

With

Medicaid

774.2%

373.0%

Figure4.Estimatesoftheprevalenceofvulnerableindividualsand340Bpatientsforindividualstakingoneormoreofthe10IRApricenegotiationproducts.

Segment

%U.S.

population

WithoutMedicaid

With

Medicaid

340Bpatients

Hospital

3.4%

6.6%

13.7%

51.1%

Sensitivityanalysis

Toassessthesensitivityofourestimatesofthe

prevalenceof340Bpatientsuponthechoiceofthresholdincondition(2),asensitivityanalysiswasperformed.Thethresholdwassystematicallyvariedbetween50%and

100%toseetheresultantchangesintheprevalenceof340Bpatients.FindingsaresummarizedinFigure5.

Figure5.Sensitivityanalysisforprevalenceof340Bpatientsinthehospitalpopulationasafunctionofthethresholdincondition(2).

%340Bpatients

30%

20%

10%

0%

50%70%80%90%100%

Threshold

Foraneligibilityperiodoftwoyearsandathresholdof80%,23.5%ofthehospitalpatientpopulationwas340B.Thisroseto28.3%whenthethresholdwasloweredto

50%,andfellto20.7%forathresholdof100%.Fora

100%threshold,patientswere340Bonlyiftheyhadpharmacyclaimsthatwerecertainlywrittenata340Bprovider.

Trendsanddriversinthevulnerablepopulation

Duringthelastdecade,thenumberofvulnerable

individualshalved.asaresultofimprovedaccessto

healthcare.TheAffordableCareAct(ACA)20introduced

measuressuchashealthinsurancemarketplaces

andMedicaidexpansionthatreducedthenumberof

uninsuredindividuals.Medicaidexpandedfrom56.5Mindividualsin2013to84.0Min202121,orfrom18.1%to

25.3%expressedasapercentageoftheU.S.population22(Figure6,page9).InlargepartduetotheACA,during

thesametimeperiodthe340Bvulnerablepopulationfellby44.6%,from15.7%in2013to8.7%in2021basedon

datafromMEPS(Figure6).

Trendsanddriversin340Bdrugdiscountrevenue

Meanwhile,duringthelastdecade340Bdrugdiscountrevenuemorethantripled,drivenbymultiplefactors.

MedicaidexpansionincreasedDSHhospitalparticipation

inthe340BprogrambyincreasingDSHadjustmentpercentages23.Theimpactofthiswasamplified

becauseallpatientsofnewlyqualifiedhospitals

weresubsequentlyusedtogenerate340Bdiscountrevenue,notonlythoseindividualsintheMedicaidexpansiongroup.Medicaidexpansionalsodecreaseduncompensatedcarecostsforhospitals24improvingtheirfinancialhealth.

340Bhospitalsgrew

TheACAbroadenedthetypesofhospitalsthatcouldparticipateinthe340Bprogram.Also,thenumberof340Bhospitalchildsitesgrew230.0%from

|8

approximately10,000in2013to33,000in202125,

sometimesbythestrategicacquisitionofcommunity

practices.Andcontractpharmacynetworksincreased

insizeby127.3%,fromapproximately11,000contract

pharmaciesin2013tomorethan25,000in202126(Figure7)whichincreasedtheabilityof340Bprovidersto

converttheirprescriptionsto340B.

Increased340Brevenue

Payerrebatesincreased225%from2013to202127(Figure7).The340BceilingpriceisequaltotheMedicaidprice

netofrebates,andhighercommercialrebatesimpactedthebestpricetermintheMedicaidstatutoryrebate28,

increasingMedicaidrebates,loweringtheacquisitioncostof340Bdrugs,andenlargingthespreadthatdrives340Bdrugdiscountrevenue.Thiscombinationoffactorstripled340Brevenue(Figure8)andcontributedtoincentives

thatmisaligned340Brevenueversusthenumberofvulnerableindividuals.

Figure6.ChangesintheU.S.population,2013vs2021.Left:Medicaidgrowth.Right:Fallinthenumberof

individualswhowereuninsuredorlivinginpovertybutwerenotcoveredbyMedicaid.Categories:“Uninsured”excludeslivinginpoverty,“Poverty”excludesboththeuninsuredandinsuredwithMedicaid,and“Both”is

uninsuredandlivinginpoverty.

2013

2021

18.1%

0%10%20%

25.3%

30%

2013

2021

8.

7%

15.7%

0%5%10%15%20%

%PopulationinMedicaidUninsuredBothPoverty

Figure7.Revenuefromthe340BDrugDiscountProgramisnolongeralignedwiththevulnerablepopulationitwas

designedtoprotect.Left:Increaseincontractpharmacies,2013to2021.Right:Growthofpayerrebates,2013to2021.

#pharmacies

20,000

10,000

0

20132015201720192021

$300B

$150B

$0B

Rebate$

CPI-U

20132015

201720192021

Year

400

300

200

9|UnintendedConsequences:HowtheAffordableCareActHelpedGrowthe340BProgram

Figure8.%vulnerablepopulationversus340Brevenue,2013to2021.

$60B

340Brevenue

$30B

$0B

340B$

%vulnerable

ACA

15%

10%

5%

0%

201320152017

Year

20192021

Discussion

Toperformthisstudywehadtomakeahandfulof

assumptions,includingtheperiodforthepatient-

providermedicalrelationship,whichindividualsto

includeinthevulnerablepopulationsupportedby

340B,andtheassumptionitismeaningfultocompare

thenumberof340Bpatientswiththenumberof340Bvulnerableindividuals.Withoutsuchassumptionsthe

currentstudywouldnothavebeenfeasiblebecause

thescopeofthe340Bprogramisnotwell-definedand

lackstransparency.Itdoesnotdefinewhichvulnerable

individualsarebeingsupportedbycharitycarenor

whatkindofcharitycare,ifany,isbeingprovided

using340Brevenue.Andhospitalsdonotreportwhichindividualstheyconsidertobepatients,therulesthey

usetodeterminethis,norhowmuch340Bdrugdiscountrevenuetheygeneratefromthem.Sincehospitalsmakeuptheirownrulesanddonotsharetheseruleswiththegovernmentormanufacturers,thereisnootherwaytoperformthisanalysis.

Giventheselimitations,ouranalysesshowedthat

viewedthroughthelensoftheU.S.populationreceivinghealthcare,the340Bprogramwasbetweendoubleand

morethantriplethesizeofthevulnerablepopulationin2021dependingonwhetherornotindividualscoveredbyMedicaidwereincludedorexcluded,respectively.

Oneoffactorsincreasing340Brevenuewassoaringpayerrebates,whichincreasedby225%from2013to2021.Whilethisincreased340Bdiscounts,itdidnotaffectthenumberofindividualswhowerepatientsof340Bhospitalsand

clinicsnorthenumberofvulnerableindividuals.

Thestudyperiodwaslimitedtotheendof2021:

thelatestyearofMEPSdataavailableatthetimeof

publishin