Blue Cross tells Health Care committee 340B discounts are linked to higher commercial drug prices in Vermont

Tom Whitley, chief medical officer at Blue Cross and Blue Shield of Vermont, told the Health Care committee on Feb. 26 that the federal 340B drug‑pricing program has contributed to higher costs for people with commercial insurance in Vermont.

Whitley said hospitals that participate in 340B obtain discounts from drug manufacturers but then charge commercially insured patients marked‑up prices, and insurers lose manufacturer rebates on those claims. "Commercial members end up paying more for 340B drugs and a higher drug loss results in higher insurance premiums," Whitley said.

The company presented state and national comparisons it said illustrate the effect. The RAND data cited showed Vermonters receiving drugs at hospitals with 340B pharmacies paying substantially more than the average sales price (ASP). Whitley said Vermont’s average appears to be about 500 percent of ASP, and that Blue Cross members in Vermont are an outlier nationally for hospital drug pricing. Using Remicade as an example, Whitley said members were paying roughly 1,112 percent of the ASP at UVM…