Controversies, competing interests surround 340B program

After questions arose over the finances and related management of the 340B discount drug program, policymakers may need more guidance regarding its future, according to a new report from the RAND Corp.

RAND, which did not offer any pointed recommendations in its report, noted that the program grew tremendously since its launch in the late 1990s, with nearly 8,000 covered entities participating at nearly 17,000 sites nationwide, and accounting for about 2 percent of total drug spending nationwide. The program could eventually double in size as the Affordable Care Act continues to unfold and provide care for many more low-income and uninsured patients, News Medical reported.

The program's growth has not come without criticism, with the pharmacy sector claiming the program deprives it of revenue and some hospitals coming under fire for how they manage the discounts. RAND also noted that there has been a lack of transparency in some facets of the program, particularly in the oversight of participating pharmacies and how hospitals manage the discounts.

Sen. Charles Grassley (R-Iowa) also scrutinized the program last year in the wake of reports that several large not-for-profit hospitals in North Carolina had used their 340B discounts to their financial benefit. In one instance, Duke University Hospital realized nearly $70 million in profits by reselling its 340B drug allotment to insured patients at market rates and pocketing the sizable difference in pricing.

"The federal 340B program has, for many years, sparked some level of controversy, but never as much as now," concluded the RAND report. "Drug manufacturers and safety-net providers are using a wide array of tools and outlets--including interest groups, lobbying, and media--to share their divergent perspectives on the purpose and appropriate role of 340B."

To learn more:
- read the RAND report (.pdf)
- here's the News Medical article