October 2, 2012—The Senate Judiciary Committee’s senior Republican has sent letters to three 340B hospitals in North Carolina —Carolinas Medical Center, University of North Carolina Hospital, and Duke University Health System—seeking information about their participation in the 340B program and how they use their drug discount savings.
In an Oct. 1 news release, Sen. Charles Grassley of Iowa said he acted after two newspapers in the state jointly published a series of articles about the finances of North Carolina nonprofit hospitals and the prices that some charge for certain medicines, including those for cancer.[ms-protect-content id=”2799″]
“The discount drug program is meant to help the poorest, uninsured patients,” Senator Grassley said. “It’s not meant to subsidize other hospital services and build up hospital surpluses. If hospitals aren’t passing drug savings on to patients, they’re abusing the system. They’re also abusing the taxpayers, including those who already subsidize the massive tax breaks given to tax-exempt hospitals. I’m looking for some answers about program use.”
The Senator is one of the members of Congress who have been investigating covered entities’ use of 340B discounts. In May, he sent a letter to UAB Hospital in Alabama asking questions about its use of the 340B program. Later that month, Reps. Bill Cassidy (R-La.) and Joe Barton (R-Texas), both members of the House Energy and Commerce Subcommittee on Health, asked the Health Resources and Services Administration (HRSA) to audit Phoebe Putney Health System in Georgia. The congressmen have questions about the system’s 340B purchases of an oncology medication whose injectable form had been in short supply.
In his Sept. 28 letters to the three North Carolina hospitals, Senator Grassley asked each one to provide the following information by Oct. 12:
- Provide a summary of all revenue received from participating in the 340B program from 2008, broken down by year.
- Explain whether, to what extent, and how the hospital has reinvested those savings for the benefit of uninsured patients.
- Provide the payer mix for all 340B drugs from 2008-2012. List the price at which the hospital purchased each 340B drug, and the price at which it sold the drug, per payer mix.
- Describe and provide documentation on the hospital’s indigent care population and composition. What is its policy on charitable care? Provide documents on the hospital’s charitable care policies.
- Has HRSA ever audited the hospital’s 340B program?
Spokespersons for all three hospitals have told the media that they are responding to the Senator’s request.
Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents hospitals enrolled in the 340B program, issued a statement yesterday noting that 340B providers may use 340B drugs for all eligible patients whether or not they are low-income, uninsured, or underinsured. The group also said that the program saves rather than costs money for federal taxpayers; that hospitals pass their 340B savings on to their patients in numerous ways; and that 340B hospitals treat patient populations that are generally sicker and less able to pay their bills than patients served by non-340B providers.[/ms-protect-content]