Key Insights from 2024 340B Report
The 340B Drug Pricing Program plays a vital role in supporting healthcare providers, offering discounted outpatient drug prices to safety-net organizations. Minnesota has taken a leading role in improving transparency around the program's financial impact. The state’s inaugural 2023 report provides detailed data on revenue, costs, and disparities among providers. Let’s dive into the specifics.
Key Findings from Minnesota’s 2024 340B Report
Total Revenue Generated
Net 340B Revenue: Minnesota’s healthcare providers collectively generated at least $630 million in net revenue.
Gross Revenue vs. Costs: The $630 million represents the difference between:
Payments received for discounted drugs: $1.5 billion.
Drug acquisition costs: $734 million.
Due to incomplete reporting, particularly for office-administered drugs, this figure likely underestimates the program’s full financial impact.
Total Revenue Generated
General Acute Care Hospitals (DSH): Representing only 13% of entities, they generated 80% of statewide net revenue—approximately $506 million.
Safety-Net Federal Grantee Clinics: These clinics, including Federally Qualified Health Centers, generated the least revenue, highlighting disparities in program benefits.
Revenue by Payer Type
Commercial Payers: Accounted for the largest share of net revenue at 54% ($343 million).
Medicare: Contributed 31% ($197 million).
Minnesota Health Care Programs (Medicaid/MinnesotaCare): Made up 14% ($87 million).
Other Payers: Represented only 1% ($3.4 million).
Operational Costs and Their Impact
Payments to third-party administrators (TPAs) and contract pharmacies totaled $120 million, reducing net revenue by about $16 for every $100 of gross 340B revenue.
Significant variability exists:
Some entities lost as much as 50% of their gross revenue to external operational costs.
Safety-Net Grantees often operated at a loss due to high administrative expenses.
Drug-Specific Revenue Insights
High-cost specialty drugs drove the majority of revenue:
Adalimumab (Humira): Generated $12 million in net revenue, averaging over $3,400 per fill.
Apixaban (Eliquis): Brought in $10 million, averaging $558 per fill.
These high-priced drugs comprised only 6% of total prescriptions but accounted for nearly 70% of net revenue.
Disparities in Benefits
The report highlights striking differences in how various types of healthcare providers benefit from the 340B program:
Large hospitals, especially those serving a mix of insured patients, saw significant financial gains.
Smaller clinics and grantees, which often serve uninsured populations, generated minimal or negative net revenue, even with discounted drug prices.
What Does This Mean for Healthcare in Minnesota?
The findings underscore the need for targeted improvements in the program:
Transparency: Clearer reporting requirements can address data gaps, especially for office-administered drugs, which account for the majority of 340B spending.
Equity: Ensuring smaller clinics and grantees can better utilize the program is essential for healthcare equity.
Efficiency: Reducing reliance on third-party administrators could help entities retain more of their revenue.
Looking Ahead
Minnesota’s 340B report is a critical step in understanding the program’s impact and fostering informed discussions. As reporting improves in future years, stakeholders will gain deeper insights into how to enhance the program for all participants.
