Chuck Grassley

United States Senator from Iowa

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Grassley Requests Hearing on 340B Prescription Drug Pricing Program in Light of GAO Report

Jul 17, 2015

WASHINGTON – Sen. Chuck Grassley of Iowa today asked the leaders of the Finance Committee to hold a hearing on the 340B prescription drug pricing program in light of a report from the Government Accountability Office (GAO) showing there is a financial incentive at participating hospitals to maximize revenue through the difference between the cost of the drug and Medicare’s reimbursement by prescribing either more drugs or more expensive drugs to beneficiaries. 

“The GAO recommends that Congress consider eliminating the ‘incentive to prescribe more drugs or more expensive drugs than necessary to treat Medicare Part B beneficiaries at 340B hospitals,’ ” Grassley wrote to Sen. Orrin Hatch, chairman, and Sen. Ron Wyden, ranking member.   “This subject matter clearly falls within the Senate Committee on Finance’s Medicare Parts A and B jurisdiction. Thus, I would like to respectfully request a committee hearing on the 340B program.”

The GAO report said the unnecessary spending on either more drugs or more expensive drugs has negative implications for the Medicare program as well as leading to increased cost-sharing and higher part B premiums for beneficiaries. 

Through his oversight work prior to the GAO report, Grassley documented that some well-funded hospitals use proceeds through the 340B program for their bottom line rather than services for low-income individuals, arguably contrary to the intention of program.

Grassley’s letter is available here.  The GAO report is available here.
 

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