• This is in spite of the fact that some Disproportionate Share Hospitals (DSH) enjoy lower drug acquisition 1 costs under the 340B program. • Moreover, likely as a result of acquiring physician practices, hospital outpatient departments now claim one-half of all infused oncology medication use. August 27, 2020, #360 Even if both of these trends (i.e., price differential and market share) have finally leveled, the status quo should be of key concern to both patients — who are burdened with cost-sharing — and plan sponsors, including employers. Encouraging site-neutral oncology infusion reimbursement rates or incentivizing patients’ use of physicians’ How Site-of-Treatment Markups for Infused Oncology offices are potential solutions. Medications Drive Cost Differences Over Time Thus far, we have focused exclusively on cost differences for infused oncology medicines by site of care. Future work will investigate whether HOPDs also charge more for other outpatient services, including non-oncology Introduction physician-administered drugs and other “shoppable” services such as diagnostic screenings, imaging, lab tests, and low-value care. A recent study by the Employee Benefit Research Institute (EBRI) determined that hospital outpatient departments (HOPDs) charged an average of 86.2 percent more for oncology medicines than physicians’ offices The EBRI report, “Cost Differences for Oncology Medicines Based on Site of Treatment,” is published as the (POs). This financial markup resulted in payers spending $9,766 more per oncology therapy user in 2016. January 16, 2020, EBRI Issue Brief, and is available online here. Moreover, this differential was not attributed to variation in drug mix across sites of care or differences in treatment intensity. Indeed, the novel analytical technique employed in the study isolated and compared unit The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in prices charged by HOPDs and POs, which do not depend on disease severity or other patient characteristics. Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby However, these results represent point-in-time snapshots of the relative expensiveness of oncology medications and does not take policy positions. The work of EBRI is made possible by funding from its members and infused in HOPDs vs. POs. Whether these unit price gaps are narrowing or widening over time is a question of sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more great importance to patients and payers. In this Fast Fact, we explore the time trends in cost differences for information go to www.ebri.org or connect with us on Twitter or LinkedIn. infused oncology medications by site of treatment. Trend in Mean Annual Chemotherapy Data and Methods Payment per User by Site of Care ® $30,000 250% Using 2015–2018 Marketscan medical claims, we constructed an annual dataset of 62,873 to 68,298 privately insured cancer patients under age 65 who received infused oncology therapy in outpatient settings. $25,018 We applied our prior coding and analytic methods to derive estimates of the share of infused oncology $25,000 192% 192% 200% medications garnered by HOPDs compared with POs in each year as well as the mean annual cost per user 189% 189% in each treatment setting. Finally, as in our prior work, we also reported the estimated expenditures for $20,812 $22,293 HOPD p $2atien 0,000 ts who would have prevailed had PO unit prices been charged instead (i.e., the counterfactual). $18,329 We held constant over time the market basket of 35 drugs, which together comprised between 81.5 percent 150% to 92.7 percent of all infused oncology spending and 89.4 percent to 91.3 percent of all utilization. $15,000 $14,113 100% $12,405 $11,554 Infused Oncology Medicines Still More Costly in Hospital Outpatient Departments Compared $10,000 $10,376 With Physician Offices 50% $5,000 In 2015, infused oncology medicines costs were 72 percent higher at HOPDs than at POs. This relative difference rose slightly to 75 percent in 2016 and then fell marginally to 74 percent in 2017 and 69 percent in 2018. As previously reported, the higher spending in the HOPD setting was almost entirely due to the per-unit price of the $0 0% 2015 2016 2017 2018 medicines. Holding drug mix and treatment intensity constant, HOPD-based therapy was $10,291 more expensive Percentage Difference in Price per Unit in Hospital Outpatient Departments Compared With Physician Offices per user per year in 2018 than it would have been if PO unit prices had prevailed. Physician Office (Actual) Hospital Outpatient Departments (Actual) Status Quo of Key Concern Hospital Outpatient Departments (Holding Drug Costs Constant) This analysis leads us to conclude that: 1 Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to certain safety-net health care providers. • The gap between HOPD and PO pricing for oncology medicines has not narrowed over time despite greater awareness of the issue. ### EBRI’s on Twitter! @EBRI or http://twitter.com/EBRI EBRI blog: https://ebriorg.wordpress.com/ EBRI on Twitter: @EBRI or http://twitter.com/EBRI Blog: https://ebriorg.wordpress.com/ © 2020, Employee Benefit R esearch Institute, 901 D St. SW , Suite 802, Wa shington, DC 20024, 202/659-0670 www.ebri.o rg 2