Public hospitals shorted on drug discounts: HHS

An HHS' inspector general's office report alleged that drugmakers routinely overcharge public hospitals and other providers participating in a discount program for outpatient drugs. The program was created by a 1992 law that requires drug companies to sell their products at a mandatory discount to public hospitals and community health centers in order to participate in Medicaid. In a sampling of September 2002 drug prices, 31% of the prices exceeded the discount, resulting in $41 million in overcharges to providers, the inspector general's office said. The office recommended that the Health Resources and Services Administration, which oversees the drug-discount program, randomly check transactions to confirm discounts, provide more pricing data to hospitals and other providers, and urge Congress to establish penalties for violations of the 1992 law. HRSA agreed with the overall findings but did not support legislation to establish penalties. Obtain the report. -- by Mark Taylor