M E M O R A N D U M
To: Reporters and editors
Re: Discount prescription drug program
Sen. Chuck Grassley of Iowa has been looking into how hospitals are using a discount prescription drug program, known as 340B. Certain hospitals appear to be making sizeable profits from the program at the expense of Medicare, Medicaid and private health insurance. An in-depth report from Kaiser Health News this month explored financial bonuses given to the leaders of several non-profit hospital systems for reasons including expansion of hospital operations. Grassley staff research found that each system except for one discussed in the articles has at least one 340B-eligible hospital. One of the medical systems in the Kaiser Health News coverage, Carolinas HealthCare System, was among three North Carolina hospital systems Grassley looked at as part of his interest in the 340B program. Grassley made the following comment on 340B eligibility and hospital executive bonuses.
“Hospitals eligible for the 340B program are supposed to have a high indigent patient population. If some 340B-eligible hospitals have significant money available for executive bonuses, that raises questions about how they allocate their resources. Are they doing everything possible to help uninsured patients receive health care, including affordable prescription drugs? I intend to continue looking into how hospitals are using the 340B program and how their uses affect other programs in the health care system.”
The Kaiser Health News project on hospital executive bonuses is available here. Grassley’s earlier correspondence with the federal agency in the charge of the 340B program, the Health Resources and Services Administration, is available here and here. Grassley’s letter to HRSA citing the three N.C. hospitals is available here. Grassley’s letters from the three hospitals are available here, here, and here. Proprietary drug pricing information is redacted in some instances. Grassley’s follow-up letter to the Carolinas Medical Center in Charlotte is available here.