• Within about six months on average, hospitals buying physician oncology practices begin to use 340B discounts to purchase drugs for the acquired outpatient sites, says a report by the Biotechnology Industry Organization. The problem is that the 340B federal drug discount program is meant for low-income Americans.
• Hospitals’ outpatient cancer-care sites quickly account for about 40% of the hospital’s total 340B chargebacks, according to the report, and almost half of such hospitals pocket the 340B savings — indicated by the fact that 340B chargebacks from the hospitals’ acquired practices often exceed the hospitals’ total charity care.

Due to economic pressure, an increasing number of physicians are becoming hospital employees, which in turn is shifting chemotherapy from community practices to hospital outpatient departments. Hospitals profit from buying oncology practices because they can generate more revenue from administering specialty drugs than independent physician-owned clinics can; and hospitals can buy oncology drugs using the 340B drug discount program. Is this report more evidence that the 340B program, launched nearly two decades ago, has strayed from its original purpose of giving more financial support to entities to help needy patients? Perhaps more program oversight is needed to uncover and address any abuses and to ensure that resources are being properly directed.