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Committee Leaders Request Audit Documents About 340B Program


WASHINGTON, DC – Energy and Commerce Committee Chairman Greg Walden (R-OR), Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA), and Health Subcommittee Chairman Michael C. Burgess, M.D. (R-TX) sent a letter to the Department of Health and Human Services’ (HHS) Health Resources and Services Administration (HRSA) yesterday, regarding the 340B program and requested audit documents from the last two fiscal years to assist with the committee’s oversight of the program.

The leaders cite multiple concerns with the program, including entities billing for duplicate discounts on the same medication, and that uninsured or underinsured patients may be paying the full price of a drug even though they are getting it through an entity within the 340B program.

“The Committee is concerned about the 340B program’s rapid growth without additional and proportional oversight,” write Walden, Murphy, and Burgess. “Provisions in the Patient Protection and Affordable Care Act (PPACA) expanded the definition of eligible entities to include ‘free-standing cancer, community and critical access hospitals on the basis of their disproportionate share hospital (DSH) percentage,’ which has increased program enrollment substantially. 340B drug sales more than doubled between 2010 and 2015 and expanded by 66 percent between 2013 and 2015 alone. As of 2011, nearly a third of all U.S. hospitals participated in the program.” 

Click HERE to read a copy of the letter.

Republicans Probing Drug Discount Program’s Rapid Growth

June 1, 2017

Republican leaders of the House Energy and Commerce Committee are investigating the recent expansion of a federal drug pricing program that offers discounts to hospitals and other providers.

The lawmakers June 1 sent a letter to the Health Resources and Services Administration, saying they are concerned about the 340B drug pricing program’s “rapid growth without additional oversight” and asked HRSA to provide information on its audits of the hospitals and other covered providers participating in the program. HRSA is the part of the Health and Human Services Department that administers the 340B program. The lawmakers, including committee Chairman Greg Walden (R-Ore.), noted that drug sales under 340B more than doubled from 2010 to 2015.

The 340B program requires drug manufacturers to provide outpatient drugs to eligible safety-net hospitals and other health-care providers at reduced prices. Drugmakers must provide the discounts in order to remain eligible for reimbursements through Medicare and Medicaid. The Affordable Care Act expanded the 340B program to include new types of providers, including free-standing cancer, community, and critical access hospitals. …

The lawmakers said HRSA doesn’t always follow up on audits of covered entities when it finds violations.

“HRSA’s lack of follow-up audits when it finds violations is troubling, and combined with the high rate of noncompliance, indicates a need for additional oversight of this program,” the letter said. …

The House lawmakers also said they are concerned that HRSA doesn’t track how much covered entities make through the 340B program and how the covered entities use program savings.

“Given the program’s ability to generate revenue for covered entities, HRSA has a vested interest in ensuring that those funds are used to benefit patients,” the letter said. “The committee is concerned about reports that uninsured and underinsured patients at 340B hospitals often pay the full list price for a drug while the hospital receives that same drug at a severely discounted price.”

Another concern the lawmakers cited is when covered entities receive duplicate discounts on the same drug. Duplicate discounts occur when a covered entity purchases a drug with a 340B discount and is credited with a Medicaid rebate.

HRSA found that about 23 percent of covered entities audited had duplicate discounts each year from 2012 to 2016, the letter said. HRSA’s audits also found that covered entities violated program requirements by reselling or transferring 340B drugs to ineligible patients. …

To read the full article online, click HERE.


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