Measuring the Relative Size of the 340B Program: 2018 Update

In June 2015, BRG published an initial report on the size of the 340B program relative to its addressable market. Since that study, the 340B program has experienced dramatic growth: total 340B purchases increased from $9.0 billion in 2014 to $24.3 billion in 2018.

However, the 170 percent growth in 340B purchases over this five-year period does not tell the entire story. At the same time purchases at the 340B price have increased, the average discount off the list price of a drug purchased through the 340B program has also increased. Medicaid and CHIP Payment and Access Commission (MACPAC) reports annually on Medicaid rebates as a percentage of gross Medicaid spending on drugs. This is the best proxy for the discount off the list price of drugs in the 340B program, because the 340B price itself is based on the Medicaid rebate amount. The Medicaid rebate percentage increased from 46 percent to 60 percent between 2014 and 2018. The combined effect of the growth in 340B discounts and the growth in drug purchases at the 340B price resulted in a 234 percent increase in gross purchases through the 340B program between 2014 and 2018, underscoring the relative growth of the program over this period.

This study was funded by the Pharmaceutical Research and Manufacturers of America.