Cowboys and Indians

  • by: |
  • 04/05/2013

According to a report in BioCentury, Senator Chuck Grassley (R, IA) has asked HHS's Health Resources and Services Administration for information on the agency's oversight of the 340B discount program, which requires manufacturers to give deep discounts on outpatient drugs to hospitals and clinics that provide healthcare to low income and other special populations.

In a letter to Administrator Mary Wakefield, Grassley requested information about whether and what type of data HRSA collects on how much revenue hospitals receive by participating in 340B, as well as how hospitals reinvest this revenue. He noted that data from three North Carolina hospitals show the hospitals are "reaping sizeable 340B discounts on drugs and then turning around and upselling them to fully insured patients" covered by Medicare, Medicaid or private insurance, which he said is "contrary to the purpose of the 340B program." Grassley asked for a response from HRSA by April 22. HRSA said it will respond to Grassley's letter.

Grassley's request comes less than two months after patient and industry groups released a report calling for a Congressional examination of the 340B program, and several months after a group of Congressional Republicans that included Grassley asked for details on HRSA's audits of the eligibility of healthcare entities for the program.

In a response to Grassley's letter, the trade group Safety Net Hospitals for Pharmaceutical Access (SNHPA) said both HRSA and HHS "have specifically acknowledged that Congress intended for hospitals to charge above the 340B acquisition cost" for patients covered by Medicare or private insurance. The group also said federal reports "clearly demonstrate" that hospitals are using revenue from the 340B program to benefit "uninsured, underinsured or otherwise vulnerable" patients.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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