Under the federal 340B program, hospitals can save 20 percent or more on outpatient drug purchases. The program requires drug manufacturers to provide price breaks to hospitals treating large numbers of poor and/or uninsured patients.
Sen. Grassley, who has repeatedly questioned whether non-profit organizations earn their tax exemption, sent letters to the health systems last week. He said the discounts seem to subsidize “bottom line operating margins,” according to the report. The senator also cited an investigation by The News & Observer and The Charlotte Observer, which reported that large non-profit hospitals are significantly inflating the price of chemotherapy medications two to 10 times over the cost.
Sen. Grassley has asked the systems to explain the revenue they’ve received from 340B and explain how savings have been reinvested.
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