ASCO Updates 340B Drug Pricing Program Policy: Enhancing Oncology Care

In early May, the American Society of Clinical Oncology (ASCO) released an updated policy statement on the 340B Drug Pricing Program, as featured in the JCO Oncology Practice journal. This update offers recommendations aimed at expanding practice eligibility, addressing potential misuse, and ensuring that the program continues to effectively serve its intended patient demographic.

Initiated in 1992, the 340B program enhances access to prescription medications for low-income and uninsured individuals. It allows qualifying hospitals and healthcare providers to purchase certain drugs at reduced costs. Following Medicaid expansion under the Affordable Care Act, the 340B program has grown significantly, becoming the U.S.'s second-largest federal drug discount initiative after Medicare Part D.

ASCO President Eric J. Small, MD, FASCO, underscored the program's importance in oncology care, highlighting its role in facilitating access to high-quality cancer treatments. However, he stressed the necessity for reforms in eligibility, transparency, and accountability to align with current healthcare practices and continue benefiting target populations.

Eligibility

• Introduce an Indigent Care Ratio (ICR) to enable non-hospital-affiliated providers, such as independent oncology practices, to qualify for the 340B program under specific criteria.
• Allow independent oncology practices with multiple locations to register additional sites if they share the same Tax ID as the primary practice.
• Permit covered entities to engage multiple contract pharmacies with limitations on administrative fees, ensuring savings benefit patient care, especially in rural and underserved areas.

Transparency and Accountability

• Increase reporting and auditing requirements for 340B-covered entities.
• Require public documentation of how 340B savings are reinvested into patient care, adhering to IRS 501(r) standards.
• Implement stringent penalties for entities failing to demonstrate reinvestment of savings in patient care.
• Address the orphan drug exclusion, enabling eligibility for 340B pricing for such medications when used for common conditions in rural facilities.
• Define the patient-entity relationship to maintain program integrity without excluding insured patients from oncology services.

Funding and Oversight

ASCO suggests that the Department of Health and Human Services or federal policymakers secure funding to support reformed program oversight. The introduction of the Indigent Care Ratio (ICR) is a method to assess 340B eligibility for community-based providers, crucial for cancer care delivery in rural and underserved regions. Dr. Small highlighted, "More than half of Americans receive cancer care in community-based oncology practices," stressing their essential role in providing necessary treatments.

This policy update is the first since ASCO's 2014 statement, adapting to the program's growth and changes in cancer care. For more information on the policy statement and author disclosures, visit the official publication website.