Some 340B hospitals pocket savings meant for low-income patients, says GAO report

Sixteen out of 28 hospitals the Government Accountability Office recently surveyed were not providing patients discounts at pharmacies as intended under the 340B Drug Discount Program, according to USA Today.

The 340B Drug Discount Program requires pharmaceutical makers to sell discounted drugs to providers, with the hopes of lowering costs and expanding access for low-income patients. However, federal regulators said more than half of surveyed hospitals may have pocketed the savings instead.

"This program is supposed to lower costs for low-income patients, that's one of the goals," Sayeh Nikpay, PhD, an assistant professor in the Department of Health Policy at Nashville, Tenn.-based Vanderbilt University, told USA Today. Dr. Nikpay added the report "implies that the savings from those drug sales are just being retained as revenue that the hospital does something else with."

Hospitals are not legally required to disclose how they use revenue generated from the 340B program, Dr. Nikpay told USA Today. Investing the revenue into upgrading or expanding patient services is how some hospitals say they use the revenue.

In a statement July 9, HHS Secretary Alex Azar said discounted purchases under the 340B program may have reached $16 billion in 2016. That's up 30 percent from 2015, according to the report.

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