Presentation (CTI)

OBJECTIVES: The 340B hospital drug markup plan has grown substantially in the past decade, but the relationship between 340B growth and employer costs has not been explored. The aim of this study is to test an association between 340B growth and commercial insurance premiums.
METHODS: We measured 340B activity based on the hospital site density (HSD), defined as the number of active hospital sites per 10,000 population in each state. We used the Kaiser Family Foundation website to collect mean employer-based insurance premiums by state and year. Using separate fixed effects regression models for family coverage and single coverage premiums, we tested whether growth in 340B density impacts changes in premiums after controlling for other factors: per capita income, labor force participation rate, smoking rate, and mean family and individual health coverage deductibles.
RESULTS: From 2017-2023, the mean family and single coverage premiums for employer-based plans grew by $5,163 (28%) and $1,746 (27%), respectively, and the average HSD increased by 0.45 (48%). Applying the growth in HSD to site density regression coefficients yields additional annual premium costs for family ($415) and single coverage ($137) premiums (p-value < 0.05 for each finding), or roughly 8% of the overall growth in employer insurance premiums. Applying this 8% growth to the total increase in employer-sponsored insurance premiums from 2017-2023 ($287 billion) translates to $22 billion in associated employer-based healthcare expenses. Since employees pay approximately 20% of premium costs, 340B growth is associated with roughly $4.5 billion increased costs to employees from 2017 to 2023. Variation of 340B activity across states suggested additional financial impacts to employer-based health insurance premiums.
CONCLUSIONS: These results suggest that 340B program growth is associated with meaningful increases in commercial insurance premiums and that states with high 340B activity pay the most in premium costs.