Studies find cancer medicines may cure facilities' bottom line as well as patients' cancer

Two studies examined spending on oral anticancer drugs as well as the 340B program, a federal program designed to help the poor. The researchers say 340B designation helps hospitals boost profits.

The first study, led by Rena M. Conti, PhD, of the University of Chicago in Illinois, examines recent trends in spending and use of oral cancer drugs. It found that average spending on the 47 available oral oncolytics, which are those cancer medications taken specifically by mouth, increased from $940 million in the first quarter of 2006 to $1.4 billion in the third quarter of 2011. The study was published in Health Affairs (2014; doi:10.1377/hlthaff.2014.0001).

Conti's second study, with coauthor Peter Bach, MD, of Memorial Sloan Kettering Cancer Center in New York, New York, examined the federal 340B program, which provides deep discounts on outpatient drug purchases. She found hospitals and clinics that joined the program since 2004 currently serve more affluent and well-insured communities than those that qualified for the program in previous years. The second study was also published in Health Affairs (2014; doi:10.1377/hlthaff.2014.0540).

"This study provides the first nationally representative empirical evidence suggesting that the program's original intent is being eroded by the actions of certain hospitals," Conti said.

In the first article, the rapid growth in spending on new oral drugs for cancer care is documented. The study covered the years 2006 through 2011.

"This is an exciting time, an era of breakthrough cancer drugs," she said. "Some of these medications have extended the lives of many people with certain types of cancer. Other new drugs may provide cures for patients suffering now. However, spending on these brand-name oral oncologics is outstripping national spending on all pharmaceuticals and all medical care spending generally."

The second study follows work last year that explained how 340B-qualified hospital-affiliated clinics can boost profits thanks to discounts on the expensive, anticancer drugs. The facilities receive the discounts under the expectation that the savings will be passed on to poor patients.

"Hospitals qualify for the program based on the poverty of their inpatient census only," Conti said. "The affiliated clinics are the only 340B institutions not required to pass the discounts off to patients or their insurers. Nor do they have to report to the government exactly how these profits are used to serve the poor. Insurers' and their patients' payments for outpatient drug treatment don't reflect the discounts the hospital receives."

The 340B program, which began in 1992, was designed to help selected hospitals and their outpatient clinics serve low-income and uninsured patients by providing discounts of 30% to 50% on outpatient drugs. About a decade ago, however, enrollment in 340B began to explode. Now more than one-third of the 4,375 US nonfederal hospitals are 340B qualified. Recent Congressional and news reports suggest that for selected hospitals, profits off the 340B program can be significant.

The new study found that communities served by hospital-affiliated clinics joining the program in 2004 or later tended to have higher household incomes, much less unemployment, and higher rates of health insurance.

"Our findings are consistent," the authors added, with recent complaints that the 340B program has been converted "from one that serves vulnerable communities to one that enriches participating hospitals and the clinics affiliating with them."

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