The Oncology Drug Marketplace: Trends in Discounting and Site of Care

Aaron Vandervelde and Eleanor Blalock write about the role 340B hospitals have played in the shift in site of care and evaluate the potential impact of growth in 340B and Medicaid on drug prices.

In preparing this current white paper, we sought to understand:

• What role do 340B hospitals play in the continued shift in site of care to the hospital outpatient setting, and what
  financial incentives exist for 340B hospitals to expand oncology services?
• How large are statutory discounts and rebates (e.g., 340B discounts, Medicaid rebates, federal supply schedule discounts) on oncology drugs relative to discretionary price concessions, and how have they evolved?
• What role may changes in the volume of statutory discounts and rebates have played in drug pricing decisions by pharmaceutical manufacturers?

The results of our analysis confirm what other studies have shown: 340B hospitals are playing an increasingly large role in oncology. Although the unintended consequences of policy decisions and market forces that have contributed to the rapid growth in the 340B program cannot be fully understood at this point, our research resulted in a number of important findings.

The paper was commissioned by the Community Oncology Alliance.