Noteworthy News

340B Program Draws Congressional Attention

A federal program that provides discounts on prescription drugs to hospitals and other providers that serve low-income patients is drawing new attention from members of Congress.

The federal 340B prescription drug pricing program requires pharmaceutical companies to offer discounts to hospitals and clinics that serve low-income and uninsured patients.  The pharmaceutical industry is now charging that providers are benefiting financially from the program, earning profits when they are reimbursed by Medicare and other insurers for more than the cost of the discounted drugs the pharmaceutical companies sell them.

Use of the 340B program has grown greatly, the pharmaceutical industry notes, since providers recognized the profit potential of the program.  The number of eligible hospitals and clinics has increased significantly in recent years and is expected to grow even more in the next few years as the Affordable Care Act expansion of Medicaid makes even more hospitals eligible.

Most urban safety-net hospitals are eligible for the 340B program.

Now, several members of Congress are investigating the program and whether it is achieving its stated goals or primarily offering new financial opportunities for health care providers.

Read more about the 340B program, how it works, and why some observers believe it has strayed from its original purpose in this New York Times articlePrescription Medication Spilling From an Open Medicine Bottle.

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