Grassley seeks answers from hospitals on drug-discount program

Sen. Charles Grassley (R-Iowa) requested information from two hospitals and a health system in North Carolina about how they are using the 340B federal drug discount program.

The request is in response to media reports that the providers–402-bed Carolinas Medical Center in Concord, 786-bed University of North Carolina Health Care in Chapel Hill and the three-hospital Duke University Health System in Durham–have charged more for certain cancer drugs, compared with prices charged by community oncologists.

Grassley said in a Sept. 28 letter to Duke University Health System President and CEO Victor Dzau that he is concerned the hospitals are purchasing drugs at 340B discounts without passing on the savings to patients.

"If 'non-profit' hospitals are essentially profiting from the 340B program without passing those savings on" to patients, "then the 340B program is not functioning as intended," Grassley wrote.

Earlier this year, Grassley requested information about the drug discount program. Sens. Grassley, Orrin Hatch (R-Utah) and Michael Enzi (R-Wyo.) and Rep. Joe Pitts (R-Pa.) asked three trade groups and Apexus, the company that manages the 340B prime vendor program, for information about how they operate the 340B program.

A Government Accountability Office report released in September 2011 found that the program needs additional oversight even though use of the program has been consistent with its purpose.

Safety Net Hospitals for Pharmaceutical Access, an association that represents hospitals that qualify for or participate in the 340B program, said in a statement that 340B hospitals are obliged to care for indigent or uninsured patients and that the discounts are used to reduce safety net providers' operating costs and boost resources for patient care.

"SNHPA is actively working with Congress, the Health Resources and Services Administration and other 340B stakeholders to enhance the 340B program's integrity and to enable healthcare providers to stretch their resources to better serve low-income, underinsured and uninsured individuals,” SNHPA said in the statement (PDF).

Spokespersons for Duke University Health System, Carolinas Medical Center and UNC Health Care said in separate e-mails that they plan to respond to Grassley's office.