UCSF Professor DiGiorgio: '340B has made cancer extremely profitable' for large hospitals

Anthony M. DiGiorgio, DO, MHA, Assistant Professor of Neurological Surgery at UCSF, said on X that the 340B program has made cancer care highly profitable for large health centers, but not for independent oncologists.

"340B has made cancer extremely profitable for large health centers but not for independent oncologists," said DiGiorgio.

According to a national review by the Community Oncology Alliance, some hospitals in the 340B drug discount program have marked up discounted cancer drugs by as much as 11 times their purchase price. Axios reported that this analysis examined 49 acute-care 340B hospitals and found significant profits on oncology drugs. This raises questions about whether hospitals are using 340B savings to benefit patients or retaining the revenue.

A study published in JAMA Health Forum analyzed commercial insurance claims from 2007 to 2019 and found that participation in the 340B program was linked to higher spending on outpatient cancer drugs for commercially insured patients. The study, which reviewed data around the Affordable Care Act’s expansion, found no evidence that 340B participation lowered drug costs for these patients, raising concerns that savings may not be passed on at the point of care.

An analysis by the American Cancer Society Cancer Action Network estimated that hospitals generated approximately $21 billion in 340B-related margins across Medicare Parts B and D, with roughly $8 billion — or 37% — tied to cancer drugs. The report suggested these margins could incentivize hospitals to expand oncology services through acquisitions or growth strategies, potentially leading to consolidation that independent practices cannot compete with and moving benefits further away from patients.

DiGiorgio has testified before Congress on 340B oversight. In a June 4, 2024 statement to the House Energy & Commerce Subcommittee on Oversight & Investigations, he discussed how the program’s design can misalign incentives. He emphasized support for the original mission to serve vulnerable patients while cautioning against practices prioritizing institutional revenue.