Safety nets still overpaying for drugs

Abstract

Safety-net providers participating in a federal drug-pricing program established by Congress in 1992 to “stretch” federal resources as far as possible are overpaying millions of dollars for their prescription medications, government investigators reported in July. Entities covered by 340B, including disproportionate-share hospitals, federally funded community health centers, and hemophilia treatment centers, overpaid a total of $3.9 million for drug products purchased in one month alone, according to the Department of Health and Human Services Office of Inspector General (OIG). That $3.9 million in overpayments, investigators declared, “might instead have been used to lower the cost of acquiring additional drugs to serve indigent patients at low or no cost.” About one in seven, or 14%, of covered entities’ purchases in June 2005 exceeded the 340B ceiling price—the highest price a manufacturer is permitted by the 340B statute of the Public Health Service Act to charge participating entities for a drug. Of the 70 covered entities sampled, 68 paid more than the ceiling prices for 2–100% of their total purchases, OIG said.