Hospitals asks HRSA to delay change to discount drug program

The American Hospital Association has asked the Health Resources and Services Administration (HRSA) to delay by at least six months the imposition of a new rule for the 340B drug discount program that would bar institutions from purchasing drugs for outpatients through a group purchasing organization, AHA News Now reported.

AHA claimed the lack of public hearings on the matter left hospitals unprepared to adjust to the rule change, which was enacted on April 7. The required changes include tweaks to overhauled inventory management systems, establishing new accounts with drug wholesalers and staff training, according to a letter sent April 3 by AHA Executive Vice President Rick Pollack to the HRSA.

A six month delay would give hospitals enough time to modify their inventory management practices to meet the new GPO policies and and avoid expulsion from the 340B program.

The rule change and AHA request come amid suspicions by U.S. Senator Charles Grassley, an Iowa Republican, that hospitals have been profiting from the drug discount program. It is intended to provide low-cost pharmaceuticals to uninsured patients or those who lack the financial means to obtain them on their own.

Instead, some hospitals have been using their 340B discounts to purchase drugs at steep discounts, then selling them to insured patients at hefty markups, FierceHealthcare previously reported. Duke University Hospital, for instance, profited to the tune of $69.7 million on drugs it purchased through the 340B program in 2012. Duke purchased the drugs for $65.8 million, then sold them to patients for $135.5 million.

"These numbers paint a very stark picture of how hospitals are reaping sizable 340B discounts on drugs and then turning around and up-selling them to fully insured patients … in order to maximize their spread," Grassley wrote late last month to the HRSA, which manages the 340B program, the Charlotte Observer reported.

For more:
- read the AHA News Now brief
- here's the AHA letter (.pdf)
- read the Charlotte Observer article