Anthony DiGiorgio, Assistant Professor of Neurological Surgery at the University of California, San Francisco (UCSF), said the 340B program’s incentives drive hospital consolidation by favoring high-priced drugs and limiting eligibility for independent oncologists.
"There's research out there that has shown it also leads to increased hospital consolidation and healthcare consolidation, right? Because an independent oncologist would not be eligible for 340B," said DiGiorgio. "It also tends to lead institutions to move away from generics and biosimilars and toward more high-priced branded drugs because there's more spread to be generated. This cancer patient, Ida Martin, right? She went to Rush for her infusion. Rush is eligible for 340B because it's a large hospital institution. If she saw an independent oncologist who is not employed by a large hospital institution, they would not be eligible for the 340B discount, so they would have to acquire the drugs at full price. Once you have this consolidation and the loss of independent physician practices, now the hospital systems have more leverage over the insurance companies and can increase the reimbursement rates."
The 340B Drug Pricing Program is a federal initiative administered by the Health Resources & Services Administration (HRSA). It mandates drug manufacturers to offer significant discounts on outpatient drugs to eligible "covered entities," including safety-net hospitals, clinics, and grantees. Established by Congress in 1992, the program aims to help these providers stretch limited resources, reach more patients, and expand services for low-income and uninsured populations.
According to multiple analyses, the incentives provided by the 340B program in oncology have led to a shift of care from independent practices into hospital outpatient departments. An American Cancer Society Cancer Action Network (ACS CAN) and Berkeley Research Group (BRG) brief indicates that hospitals account for approximately 87% of 340B purchases, nearly all of which are for oncology. The brief documents growth in cancer "child sites" at 340B hospitals, citing financial advantages from drug "spread" and acquisitions of oncology practices.
The Community Oncology Alliance's (COA) 2025 "Prescription for Health Care Reform" appendix links 340B incentives to consolidation. From 2018 to 2020, it reports that 74.5% of community oncology practice acquisitions were made by hospitals benefiting from the 340B program. In total, since 2008, 1,748 community oncology practices have closed, merged, or been acquired due to site-of-care economics driven by the program.
DiGiorgio's work spans neurotrauma, minimally invasive spine surgery, and health policy. UCSF’s profile highlights his roles and training as context for his commentary on how incentives shape care delivery.
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