ideasIdea

Pass 340B discounts on cancer drugs through to the patient's bill

Hospitals in the 340B programme buy cancer drugs at steep discounts but usually bill patients and insurers the full price; requiring the discount to reach low-income patients would turn a hospital subsidy into patient relief.

The 340B programme lets qualifying hospitals buy outpatient drugs at discounts of 25% to 50% or more, with no requirement that the saving reach the patient. HRSA reported $66.3 billion of purchases at 340B prices in 2023. A pass-through rule would require covered entities to charge uninsured and under-insured patients no more than the 340B acquisition cost plus a dispensing fee for oncology drugs, with the hospital keeping the margin only on insured patients.

Hypothesis

A pass-through requirement for uninsured and under-insured patients will reduce out-of-pocket oncology drug bills at 340B hospitals by more than half for those patients without reducing hospital participation in the programme.

Rationale

The programme's statutory purpose is to stretch scarce resources for vulnerable patients; the mechanism exists (some hospitals already do this voluntarily) but is not required.

What would test it

State-level pass-through laws in two or three states, evaluated against neighbouring states on patient charges, charity care and hospital participation.

Maturity

speculative

Who has to act

policy

Cost to try

Medium ($1M to $50M)

Years to first evidence

Bottlenecks it attacks

Prices and value · New cancer drugs routinely cost over $150,000 a year, often for months of benefit. Systems cannot afford them and patients go bankrupt.
Incentives reward me-too drugs and marginal gains · The system pays the same for a drug that adds two months as for a cure, so companies race to copy rather than to cure.