Grassley, Cassidy Seek Answers from Georgia Hospital on Discount Drug Program

Press Release

By:  Bill Cassidy Chuck Grassley
Date: April 18, 2013
Location: Washington, DC

Sen. Chuck Grassley of Iowa and Rep. Bill Cassidy of Louisiana today asked a Georgia hospital for details of its use of a federal discount prescription drug program, known as 340B. They wrote to the Columbus Regional Healthcare System after a hospital executive said during a public interview that the hospital does not receive a "windfall of profits" from participating in the program and puts the proceeds into the hospital.

"When I looked at three North Carolina hospitals' use of this program, the numbers showed the hospitals were reaping sizeable 340B discounts on drugs and then upselling them to fully insured patients to maximize their spread," Grassley said. "If "non-profit' hospitals are essentially profiting from the 340B program without passing those savings to their patients, then the 340B program is not functioning as intended. Our inquiry into the Georgia hospital will help us continue to examine hospitals' use of the 340B program."

Cassidy said, "As a physician who has spent 20 years caring for the uninsured, I recognize the value and importance of the 340B drug discount program. Given this importance, we must be sure that its good work is not threatened by those who misuse. Our common goal must be better care for those who are less fortunate."

The 340B program requires drug manufacturers to give deep discounts on certain outpatient drugs to hospitals that serve large numbers of uninsured and under-insured patients. Grassley and Cassidy are among the members of Congress who are concerned that hospitals increasingly appear to be making sizeable profits from the program at the expense of Medicare, Medicaid and private health insurance. The federal Health Resources and Services Administration (HRSA) conducted poor oversight of the program for a long period but is beginning to exert more scrutiny under pressure from Congress.