Wednesday, June 16, 2021

EXCLUSIVE: The 340B Program Soared to $38 Billion in 2020—Up 27% vs. 2019

Despite what you may have heard, the 340B Drug Pricing Program continues to thrive.

Discounted purchases under the program reached at least $38 billion in 2020. That figure is an astonishing 27% higher than its 2019 counterpart—and more than quadruple the value of discounted purchases in 2014.

Drug Channels has exclusively obtained the 2020 amount from the Health Resources and Services Administration (HRSA). We received it by filing a Freedom of Information Act (FOIA) request that was just answered yesterday. You can read our FOIA letter below, along with more details on the program's growth.

The 340B program’s size now exceeds the Medicaid program’s outpatient drug sales—and accounts for nearly 20% of the total rebates and discounts that manufacturers provide for brand-name drugs. Alas, many elements of the 340B program—including its controversial contract pharmacy component—lack a comprehensive regulatory infrastructure.

I’ll help you understand what these new figures mean during DCI’s upcoming live video webinar, Drug Channels Update: 340B Controversies and Outlook, on June 25, 2021. Click here to learn more and sign up.


In previous years, HRSA has willingly provided Drug Channels with data measuring the 340B program. Apexus, the HRSA-designated Prime Vendor, reports these data to HRSA. A little-known fact: Apexus is owned by Vizient, one the largest hospital group purchasing organizations.

This year, I had to file an FOIA request to pry the data from HRSA. I have reproduced the letter at the bottom of this article so you can see the figure for yourself.


The chart below demonstrates the explosive growth of the 340B program:

[Click to Enlarge]

  • Discounted purchases made under the program totaled at least $38.0 billion in 2020—an increase of 27% over the $29.9 billion for 2019.
  • The compound average growth rate (CAGR) of 340B purchases was 27.1% from 2014 through 2020. Over the same period, manufacturers’ net brand-name drug sales grew at an average annual rate of slightly more than 5%.
  • According to IQVIA, the wholesale acquisition cost (WAC) list price value of 340B purchases was $80.1 billion in 2020. (source) That equates to about 16% of pharmaceutical manufacturers’ total U.S. gross sales of brand-name drugs at list prices. The value of discounted purchases grew more quickly than did the value of WAC list prices, due to changes in product mix and growth in the average 340B discount rate.
  • We estimate that the total value of pharmaceutical manufacturers’ gross-to-net reductions for brand-name drugs was $217 billion in 2020. (See Section 9.2.2. of our 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.) Therefore, manufacturers’ discounts under the 340B Drug Pricing Program account for 19% of the total gross-to-net reductions for brand-name drugs.
Note that the data from Apexus include only indirect sales made via wholesalers. The $38.0 billion figure may be less than the actual total of 340B purchases at discounted prices. That’s because the Apexus data exclude an unknown amount of manufacturer sales made directly to healthcare institutions as well as some sales by specialty distributors.


On next week's live video webinar, I’ll do a deep dive into the 340B contract pharmacy market so you can understand what the program’s ongoing growth means for payers, PBMs, manufacturers, and covered entities.

See you then!


Here is the actual letter that I received yesterday:

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