The Pharmaceutical Research and Manufacturers of America (PhRMA) commissioned Milliman to develop a regression model to compare Medicare Part B fee-for-service (FFS) outpatient hospital drug spending for patients using outpatient drugs at hospitals participating in the 340B program relative to non-340B hospitals. This analysis builds on previous research conducted by Milliman for PhRMA. Our previous report, published in 2025, analyzed 2023 commercial data from Milliman’s proprietary commercial dataset, and 2022 Medicare data from 100% research identifiable files from the Centers for Medicare and Medicaid Services. Results consistently showed higher per-user costs at 340B hospitals relative to non-340B hospitals, regardless of market (Medicare or commercial), hospital characteristics, or patient characteristics. Moreover, the cost differential between 340B and non-340B hospitals widened across successive Milliman studies.
This new report builds on those findings and includes additional analyses relative to previous reports, including regression-based analysis, a longitudinal view with data through 2024, and additional hospital characteristics. While each of the prior analyses consistently showed the same directional relationships, they did not employ a comprehensive statistical framework capable of fully disentangling potential confounding factors. This analysis enhances the statistical rigor of previous analyses by applying a multivariate regression model to isolate the effect of 340B program participation on Part B drug costs.
Key observations include the following:
- Hospital outpatient per user per month (PUPM) drug spending at 340B hospitals is 20% to 52% higher than at non-340B hospitals, with the differential varying and generally increasing year over year.
- Drug mix differs between 340B and non-340B hospitals, with 340B hospitals exhibiting 6% to 41% higher per-claim costs across the study period.
- The drug utilization per user, or the average claim counts per user, is 15% to 32% higher at 340B hospitals than at non-340B facilities across the six-year study period.
This report was commissioned by the Pharmaceutical Research and Manufacturers of America.