The House Committee on Energy and Commerce (Committee) sent a letter dated June 1, 2017, to the Health Resources and Services Administration (HRSA) Administrator expressing concerns about the growth and oversight of the 340B Drug Pricing Program (the Letter).  The Letter requested by June 15, 2017, documents collected by HRSA “referring to covered entity audits conducted during FY 2015 and FY 2016.” 

The 340B program enables eligible organizations, referred to as covered entities, to receive outpatient drugs from manufacturers at significantly reduced prices.  Covered entities include Medicare/Medicaid Disproportionate Share Hospitals, Rural Referral Centers, children’s hospitals, federally qualified health centers, Ryan White HIV/AIDS program grantees, and other safety net providers.  Drug manufacturers are required to provide these discounts in order to remain eligible for Medicare and Medicaid reimbursement. 

The Committee notes in the Letter several concerns commonly voiced by the pharmaceutical industry regarding oversight of the growing 340B program.  The Committee points out that HRSA does not track the amounts saved by covered entities under the 340B program or how the covered entities use the savings, nor does it require hospitals to use the savings in a specific way.  Thus, the Committee expresses concern that uninsured and underinsured patients pay the full price of drugs in the 340B drug program when the hospital pays for the same drugs at a substantially discounted prices.  Moreover, the Letter alleges that HRSA’s audits reveal that some covered entities occasionally bill for duplicate discounts on the same drug and divert, resell, or transfer 340B drugs to ineligible patients, but that HRSA does not follow up on its audit findings when it finds violations.

For a copy of the Letter, please click here.