Senate Finance Committee Chairman Chuck Grassley (R-Iowa), who has questioned pharmaceutical companies about their pricing practices in the past, is asking HHS to help hospitals that may have been overcharged for drugs get their money back.
In a recent letter, Grassley cited two reports from HHS' inspector general's office that said facilities in the 340B Drug Discount Program were being overcharged. The program allows providers that offer indigent care to receive price breaks on the $3 billion they collectively spend on drugs.
In the July 23 letter, addressed to HHS Secretary Tommy Thompson and Health Resources and Services Administration Administrator Elizabeth Duke, whose group oversees the discount program, Grassley said he was troubled that the HRSA can't enforce the law. He asked for an outline of changes the agency has made since March 2003, when the first report concluded that five drugmakers had overcharged program members by a total of $6.1 million on the sale of 11 drugs over the course of a year.
"The Committee on Finance is taking a close look at the drug-pricing practices of many drug companies participating in federal healthcare programs," Grassley said in the letter.
The second report, released in June, said the HRSA needed to update its database of providers in the program and that the facilities overpaid drug companies by $41.1 million during the month of September 2002. In the wake of that report, Central Alabama Comprehensive Health Care, which operates about 10 clinics in Alabama, last month filed a lawsuit in U.S. District Court in Montgomery, Ala., against nine pharmaceutical companies. No other providers have joined the lawsuit.
This isn't the first time Grassley has taken issue with drug companies' prices. In April, he and Sen. Max Baucus (D-Mont.) wrote a letter to 19 pharmaceutical companies asking about their pricing policies (May 17, p. 20).
Under the 340B program, drugmakers are supposed to reveal their lowest prices to the government and then offer discounts to those in the program. Since members of the programs don't know the lowest price drugmakers offer, they may not know whether they are receiving discounts.
A House bill, which was introduced by Rep. Bobby Rush (D-Ill.) in April and was sent to the Energy and Commerce Committee, calls for establishing a Web-based list of prices of the discounted rates. Sen. Jeff Bingaman (D-N.M.) plans to unveil a bill in the fall that would also give greater transparency to the prices, said Bruce Lesley, Bingaman's senior health adviser.
Jill Gerber, a spokeswoman for Grassley, said the senator is still gathering information on the issue and hasn't decided if he'll introduce legislation or if there will be hearings on the issue.