Agency Confirms Poor Oversight of Federal Discount Drug Program PDF Print E-mail
News Releases - Health, Medicine & Nutrition
Written by Grassley Press   
Friday, 11 November 2011 14:43

WASHINGTON – Sen. Chuck Grassley of Iowa today called for effective oversight of the federal discount drug program after the federal agency in charge of it confirmed it has not conducted a single audit since the program began in 1992.

“This program is growing in popularity,” Grassley said.  “That will only increase under the health care overhaul law, which increased eligibility.  The federal government needs to get a handle on potential abuse before program growth gets out of hand, the taxpayers have to pay for it, and program sustainability is in question.”

The government entity that runs the 340B program, the federal Health Resources and Services Administration (HRSA), confirmed in a letter to Grassley, in response to an inquiry from Grassley and Sen. Orrin Hatch and Rep. Fred Upton, that it has not conducted any program audits itself.  The agency said it has referred only two cases for outside audit, one to an inspector general and one to the Justice Department.

“Those were both very narrow cases,” Grassley said.  “With the lack of oversight, the taxpayers through state and federal governments could be grossly overpaying for prescription drugs and not know it, and that situation could continue to accelerate.  The agency needs to start conducting oversight and keep going.”

The health care reform law enacted last year expanded the 340B program to include additional types of hospitals.  The law also included measures to improve program integrity, including provisions to prevent drug manufacturers from overcharging program participants and sanctions in the form of payments to manufacturers for eligible hospitals and other health care entities that violate program requirements.  However, the Government Accountability Office said more steps are needed, including audits.

HRSA’s response to Grassley is available here.  Background on the cases referred by HRSA to the Health and Human Services Office of Inspector General and Justice Department are available here and here. Information on the Grassley-Hatch-Upton inquiry to HRSA is available here.

The Government Accountability Office September report concluding more oversight is necessary is available here.  A June 2011 Health and Human Services Inspector General report that raised questions of program integrity without proper federal oversight of taxpayer dollars is available here.

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