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Hospital 340B Status, Geographic Location Linked to Lower Price Markups for Cancer Drugs

Hannah Musick

A cross-sectional study in Otolaryngology–Head and Neck Surgery showed private payers spent more for newer biological medications in head and neck squamous cell carcinoma (HNSCC) treatments compared with traditional chemotherapeutic agents. 

Lower price markups were also observed for 340B hospitals located in the northeastern and western United States. 

Between December 2021 and June 2022, data sourced from publicly available files was examined from the top 50 hospitals in otolaryngology from the US News and World Report. 

Researchers assessed private payer-negotiated pricing trends of FDA-approved HNSCC medications including pembrolizumab, nivolumab, cetuximab, cisplatin, carboplatin, and paclitaxel. 

Researchers examined the prices hospitals charged to insurers, the negotiated final payments, and how much patients without insurance paid hospitals for the most often reported doses of the selected HNSCC therapies. Prices paid by government payers were excluded.

Study results showed that only about half of the hospitals in the study publicly disclosed prices for HNSCC therapies. Out of 50 hospitals, 48% reported prices for at least 1 of the included medications. 

Traditional chemotherapeutic agents were more affordable than newer biologics and prices were most varied the most for paclitaxel, the cheapest medication. Prices varied the least for pembrolizumab, the most expensive medication. All the biologics had similar annual costs for their approved medication regimens.

Of the included hospitals, 88% were eligible for the 340B drug pricing program. The 340B hospitals had a 229% lower price markup than hospitals that did not qualify for the program.

In geographical hospital-level factors, hospitals in the Northeast and West coast had a 570% to 571% lower markup over average sales price than hospitals in the Midwest.

“Hospitals with more private payers charged less than hospitals with a fewer number of private payers, bigger hospitals charged slightly more than smaller hospitals, and hospitals in more populated areas charged slightly less than hospitals in less populated areas,” summarized the researchers. 

Ultimately, the study confirmed price nondisclosure is a continuing issue for among hospitals and patients.