The International Foundation for Autoimmune & Autoinflammatory Arthritis (AiArthritis) commissioned Milliman to analyze contracted reimbursement rates of physician-administered autoimmune drugs at 340B and non-340B hospitals. It is estimated that 8% of people in the United States have an autoimmune disease. Biologic drugs and their biosimilars are mainstays of treatment for these conditions, and while many biologic drugs are self-administered by patients at home, some require administration by a healthcare professional. The 340B drug pricing program allows eligible hospitals and clinics that serve a high proportion of low-income or uninsured patients to purchase outpatient drugs at significantly discounted prices. The program aims to support safety-net providers in expanding access to care.

To better understand the differences in contracted reimbursement rates and margins between hospitals for provider-administered autoimmune biologic drugs, we performed an analysis of hospital price transparency data, which reflects the contracted rates that hospitals have negotiated with payers. The analysis included 10 autoimmune drugs and their biosimilars across 25 hospitals in the United States, covering commercial, Medicare, and managed Medicaid contracts.

Key findings and takeaways:

• If 340B hospitals are able to use their higher contracted reimbursement margins to provide more affordable or comprehensive care, they could improve access for underserved populations.
• Greater transparency regarding how higher contracted reimbursement margins are used at 340B hospitals could provide clearer insight into the extent to which financial benefits from 340B programs support patient access and care delivery.
• Median contracted reimbursement levels for autoimmune drugs at 340B hospitals are about 8 percentage points higher than those at non-340B hospitals.
• 340B hospitals generally had higher contracted reimbursement compared with non-340B ones, including when comparing the two within the categories of non-children and children hospitals.
• 340B hospitals often had greater contracted reimbursement rates, yet they have substantially lower drug acquisition costs.
• 340B hospitals generally realize higher margins for autoimmune drugs compared with non-340B ones.

This report was commissioned by the International Foundation for Autoimmune & Autoinflammatory Arthritis (AiArthritis).