A new study on hepatitis C virus (HCV) drug pricing has found that list price reductions appear to have increased pharmaceutical companies’ net revenues over the past few years but not those of the 340B-eligible health care facilities that bought them. The findings suggest that such drug pricing deals may not be helping increase access to care, MedPage Today reports.
For the study, which was published in JAMA Network Open, researchers conducted a cross-sectional analysis of 112,630 Medicare Part D hepatitis C treatment claims. They examined the three major parties under the 340B system: hospitals and clinics that serve a high proportion of uninsured or underinsured people (aka 340B entities), pharmaceutical manufacturers and pharmacy benefit managers (PBMs), the firms that manage and negotiate drug prices for large health insurers.
The study found that after reducing the list price of three hepatitis C drugs by 60% in 2018, estimated net revenues for drug companies rose by nearly 28%; by contrast, net revenues for 340B-qualifying health care organizations dropped by an estimated 74%. Meanwhile, the PBMs that negotiated the deals also appear to have benefited under recent price negotiation schemes.
In a commentary about the study, Benjamin Paul Linas, MD, MPH, of the Boston School of Medicine and the Boston School of Public Health, said the study’s central finding is that drug manufacturers manipulate prices at the expense of community health care, Linas wrote: “By lowering the list price for a drug, the manufacturer lowers its gross revenue but also reduces both costs [the discount to the 340B entity and the rebate to the PBM].” The result is that “lowering list price paradoxically results in greater net revenue for pharmaceutical manufacturers, while at the same time depriving the 340B entity of much of its revenue.”
The study recommends that policymakers reconsider the role of 340B discounts on pharmaceutical companies’ pricing decisions when evaluating policies for reducing drug spending. It also pushes for far greater transparency to ensure deals are struck fairly for every side.
For an overview of the study’s findings, click here.