Monterey, CA Hospital Abuse Of Discounted Drug Program (340B) Could Result In Its Demise

View From A Non-Profit Serving Carmel, Carmel Valley, Gonzalez, Greenfield, King City, Marina, Monterey, Pacific Grove, Pebble Beach, Salinas, Seaside And Soledad California

Because of the abuse of program 340B, which requires most drug companies to provide significant discounts of 20-50% to hospitals and clinics that treat low-income and uninsured patients, the program may come to an end, which would be a sad situation.  Because of a loophole in the law, these clinics that serve the poor can also serve those covered by Medicare or private insurance, buy the drugs at a discount, sell them at retail and pocket the difference.  In a report issued today, the pharmaceutical industry trade groups said that some hospitals have gone overboard in using the program to generate revenue, straying from the original intent of the law which called for the discounts to be narrowly focused.  The House and Senate are investigating the program, which they have said suffers from murky rules and lax enforcement.  They should, and I hope they close this loophole rather than eliminate the program altogether.  "If 'nonprofit' hospitals are essentially profiting from the 340B program without passing those savings to its patients, then the 340B is not functioning as intended," Senator Charles Grassley (R-Iowa) said in letters sent to three medical centers last October.  The Health Resources and Services Administration, which oversees the $6.9 billion/year program with a pitiful budget of only $4.4 million per year, did its first hospital audits last year since the program began in 1992.  As a result, 271 treatment sites belonging to 85 hospitals were removed from the program.  Good for them.  I hope they receive more funding so these audits can continue.

Please note that this blog reflects my personal opinion and may or may not reflect the opinion of Hands To Help Seniors and the individual members comprising the Board of Governors.