US Senator Grassley questions continue about 340B discount drug program

US Senator Chuck Grassley (Republican, Iowa) is looking into how hospitals are using a discount prescription drug program, known as 340B. Certain hospitals appear to be making sizeable profits from the program at the expense of Medicare, Medicaid and private health insurance, he noted. Sen Grassley asked the federal agency in the charge of the program, the Health Resources and Services Administration, about its oversight of the program.

The HRSA responded by noting that the 340B statute (42 USC section 256b) does not limit the manner in which participating covered entities utilize the savings from participation in the Program. Therefore the HRSA does not have the authority to require that covered entities either limit their charges for 340B drugs or direct 340B-derived revenues to any particular activity. Moreover, the HRSA does not collect information regarding covered entities' use of revenue accrued by sales of, or charges for, discounted 340B drugs, but said it would be happy to talk to Sen Grassley and his staff again about the program.

In response to these comments, Sen Grassley said: “The law requires HRSA to increase its guidance to participants in areas such as the definition of a patient. I intend to follow up with HRSA on the progress of those updates. Congress needs to know the extent to which the agency believes it lacks the statutory authority to ensure that hospitals use the 340B program to help the uninsured receive affordable prescription drugs. Medicare and private insurance are paying much more for some drugs than the hospitals paid because of the program discount. Congress needs a full picture of how hospitals are using the program and how their uses affect other programs in the health care system.”