340B incentivizes hospital-clinic M&A, drives higher health spending: CBO

Dive Brief:

The 340B drug discount program incentivizes hospitals to purchase outpatient clinics and prescribe more and higher-cost drugs — behaviors that tend to increase costs for the federal government and commercial health plans, according to a new report from the nonpartisan Congressional Budget Office.

Only one-third of the sharp growth in 340B spending since 2010 is due to rising drug costs and higher prescribing of more expensive drugs, the CBO estimates. Instead, the growth has mostly been fueled by hospitals acquiring off-site clinics and contracting with more independent pharmacies, along with more providers becoming eligible for 340B.

Though the CBO stressed it doesn’t have enough data to quantify the influence of each factor individually, the agency believes that the bigg