Drug Discounts Have Pharma Crying Foul
Written by Editor   
Wednesday, June 25, 2014 02:40 PM

In 1992, the federal government told drug manufacturers they had to give steep discounts to hospitals that treat a large percentage of poor patients.  The law got bipartisan support, and it was a boon for hospitals and the federal government. In the decades that followed, the drug discount program has grown in leaps and bounds. But this spring as the feds have been drawing up new rules for the program, a pitched battle has broken out between hospitals and drug manufacturers.

But here's the rub. Sometimes, instead of passing on drug discounts to patients, hospitals sell the medicines at higher prices to their insured patients. The hospitals use the proceeds to fund clinics, staff, and other services that the hospitals say benefit everyone. The law allows them to do that, the hospitals say, because it's a way to stretch "scarce federal resources" -- a phrase that is in the law.

Oregon Health and Science University Hospital's Joe Fazio, assistant director of pharmacy services, says such drug sales are justifiable under the 340B program because some drugs -- like those for chemotherapy, for instance -- can't simply be handed over to patients. Their administration has to be supervised by doctors and nurses, which is expensive.

Many hospitals have been buying up clinics which have not qualified for the 340B program, then bringing them under the hospital umbrella.  "Hospitals are not only trying to maximize their own 340B revenues, they're looking to acquire -- and they are acquiring -- many community oncology practices, putting them in their system," she says. "And by doing so, they can all of a sudden tap into new revenues they couldn't get before."

 The federal Health Resources and Services Administration that oversees 340B is expected to release those new rules this month.

Source:  http://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/46495