Exploring the Growing Impact of Kidney Care Programs and the 340B Program

Exploring the Growing Impact of Kidney Care Programs and the 340B Program

Introduction:

In recent years, there has been a significant focus on improving healthcare outcomes for individuals living with chronic kidney disease (CKD) or end-stage renal disease (ESRD). Baylor Scott & White Health Plan, along with Baylor Scott & White Quality Alliance, has launched a kidney care program for its Medicare Advantage members with CKD or ESRD. This program aims to enhance the patient experience and provide comprehensive, high-quality care while also reducing healthcare costs. Additionally, the 340B program, which offers discounted purchases for eligible entities, has experienced remarkable growth. In this article, we will explore the reasons behind the launch of the kidney care program and delve into the fascinating developments within the 340B program.

Improving Kidney Care for Medicare Advantage Members:

Baylor Scott & White Health Plan's decision to launch a kidney care program for its Medicare Advantage members with CKD or ESRD stems from its commitment to enhancing the patient experience and providing high-quality care. By addressing the specific needs of individuals with kidney disease, this program aims to improve health outcomes and reduce healthcare costs. The program is offered at no additional cost to both the members and the providers, ensuring accessibility and affordability for those in need.

The Expanding Impact of the 340B Program:

The 340B program, which offers discounted purchases on prescription drugs for eligible entities, has seen remarkable growth in recent years. In 2022, discounted purchases under the program reached a record-breaking $53.7 billion, showcasing a significant increase of 22.3% compared to the previous year. It is intriguing to note that hospitals accounted for 87% of these purchases, highlighting their substantial role in the program.

Implications of 340B Program Growth:

Despite drug prices growing more slowly than overall inflation, every 340B covered entity type experienced double-digit growth in purchases. This growth is particularly noteworthy considering that manufacturers' contract pharmacy restrictions, which reduce 340B purchases, accounted for only a small fraction of the total purchases. The chart below demonstrates the explosive growth of the 340B program:

[Insert chart]

The list-to-340B gap, which represents the difference between purchases at list prices and discounted 340B prices, reached $52.3 billion in 2022. This gap signifies the financial benefit collected by 340B covered entities. Manufacturers' discounts under the 340B program accounted for approximately one-fifth of the total gross-to-net reductions for brand-name drugs, highlighting the program's significant impact.

Key Insights and Observations:

• 1. The compound average growth rate of 340B purchases from 2015 to 2022 was 23.6%, while manufacturers' net drug sales grew at an average annual rate of only 3.6%. This stark contrast emphasizes the substantial expansion of the 340B program.

• 2. The wholesale acquisition cost (WAC) list price value of 340B purchases in 2022 was $106 billion, equivalent to over 16% of pharmaceutical manufacturers' total gross sales of brand-name drugs at list prices. This demonstrates the program's financial significance.

• 3. With a net drug spending projection of just $45 billion for 2022, the 340B program has become the second-largest government pharmaceutical program. Despite its size, the program lacks a well-developed regulatory infrastructure, administrative controls, and clear legislation, setting it apart from Medicare and Medicaid.

Actionable Advice:

• 1. For healthcare providers: Consider exploring and implementing kidney care programs to enhance the patient experience and improve outcomes for individuals with CKD or ESRD. Collaborate with health plans and alliances to develop comprehensive and cost-effective initiatives.

• 2. For policymakers: Address the growing impact of the 340B program by establishing a regulatory infrastructure, implementing administrative controls, and enacting clear legislation to guide its operations. This will ensure transparency, accountability, and optimal utilization of the program.

• 3. For pharmaceutical manufacturers: Evaluate the potential benefits of participating in the 340B program, considering its significant growth and impact on brand-name drug sales. Engage in discussions with covered entities to determine mutually beneficial partnerships.

Conclusion:

The launch of Baylor Scott & White Health Plan's kidney care program exemplifies the commitment to improving the patient experience for individuals living with kidney disease. Simultaneously, the rapid growth of the 340B program underscores its importance in providing discounted purchases for eligible entities. By understanding the implications of these developments and taking actionable steps, healthcare providers, policymakers, and pharmaceutical manufacturers can contribute to the advancement of kidney care and the effective management of the 340B program.