A low-profile drug discount program is getting increased attention from a federal agency and members of Congress, including scrutiny of a South Georgia hospital’s...

A low-profile drug discount program is getting increased attention from a federal agency and members of Congress, including scrutiny of a South Georgia hospital’s medication purchases.

The 340B drug discount program allows hospitals and other safety-net organizations to get big discounts when buying medications.

Several U.S. lawmakers, in letters to the Health Resources and Services Administration (HRSA), have sought to ensure that the program is serving the right patients. They have cited a Government Accountability Office report saying the drug program has ‘‘inadequate’’ oversight by HRSA.

And in a separate letter, two House members, Reps. Bill Cassidy (R-La.) and Joe Barton (R-Texas), asked HRSA in April to audit a South Georgia hospital, Phoebe Worth in Sylvester, and its parent system, Phoebe Putney Health System, over the amount of a cancer drug the 25-bed hospital purchased through the discount program.

Their letter said that while Phoebe Worth has a small outpatient cancer treatment program, it ordered unusually large amounts of a cancer drug, Fluorouracil, last October and November. “It seems unreasonable that such a large quantity of drugs is needed,’’ the letter said.

HRSA said in an email to GHN last week that it is reviewing the purchases. The agency declined further comment.

The 340B program is designed to provide drugs for outpatient services only, not for patients getting care in an inpatient setting.

A spokesman for Cassidy told GHN that the two congressmen, from the data provided to them, determined that Phoebe Worth ‘‘was the most problematic’’ among hospitals in the 340B program they reviewed and ‘’therefore addressed first by the congressmen.’’

A Phoebe Putney Health System spokeswoman said Monday that the organization has given HRSA ‘‘a full accounting’’ of the drug purchase.

The full amount ‘‘was appropriately used by the Phoebe Cancer Center’’ or was returned to the drug manufacturer, said the spokeswoman, Jackie Ryan.

She said that when the manufacturer of Fluorouracil reinstituted deliveries after a shortage of the drug was resolved, ‘‘we received more than we needed.’’ The extra amount was then returned, she said.

The 340B program allows safety-net hospitals, children’s hospitals, community health centers, clinics and other entities to buy pharmaceuticals at 20 percent to 50 percent discounts for outpatient drugs, allowing them to provide more services to low-income, uninsured or underinsured patients.”

Safety-net hospitals rely on 340B to provide improved access and quality care to the vulnerable patients in their communities, said the Safety Net Hospitals for Pharmaceutical Access, an association of more than 800 hospitals nationwide.

The hospitals use 340B savings to reduce the price of drugs to patients, to increase access to drugs, and to enhance pharmacy services, the group said.

The Government Accountability Office reported a year ago that the number of health organizations in the 340B program has doubled over the past 10 years, to more than 16,000.

The Affordable Care Act allows more organizations to be eligible for the drug discount program, including ‘‘Critical Access Hospitals’’ such as Phoebe Worth. These are generally hospitals of 25 beds or less in rural areas of the nation.

The federal government is stepping up supervision of this program, said Carol Saul, an Atlanta health care attorney with Arnall Golden Gregory. “They’re now proactively auditing eligible providers.’’

With the expansion of the drug discount program, Saul said, “you have a greater potential for diversion of drugs from outpatient to inpatient.’’

The Safety Net Hospitals group says that HRSA has audited 51 health care providers enrolled in 340B over the past year, including hospitals, community health centers, and other types of eligible entities. “HRSA hasn’t disclosed the entities,’’ the Safety Net group said.

HRSA ‘‘primarily relies on participant self-policing to ensure program compliance,’’ the GAO report said. “Other than relying on self-policing, HRSA engages in few activities to oversee the 340B program.’’

Earlier this year, U.S. Sens. Chuck Grassley (R-Iowa), Michael Enzi (R-Wyo.) and Orrin Hatch (R-Utah), along with Rep. Joe Pitts (R-Pa.), asked for a more detailed accounting of the program.

“With the reliance on self-policing among participating manufacturers and covered entities and the increase in the number of new settings in which the program is offered, the risk of improper purchases or diversion of 340B drugs has significantly increased,’’ the lawmakers wrote in a letter to stakeholders.

The drug discount program scrutiny has coincided with shortages of certain drugs, and these shortages have also caught the attention of Congress.

But Saul says the FDA has never pointed to the 340B program as a cause of drug shortages, citing instead manufacturing problems or raw materials shortages.

Cassidy and Pitts have asked HRSA to issue ‘‘an updated definition of a patient that ensures the program’s eligibility is for those truly in need and curbs any misuse of the program.’’

HRSA said it’s reviewing the patient definition issue.

Aside from the cancer drug purchase, the Phoebe Putney system is in the federal spotlight in a separate, unrelated way.

The Federal Trade Commission is challenging the purchase of another Albany hospital by the local hospital authority, in a case that will be considered by the U.S. Supreme Court. The acquisition expanded the Phoebe health system and removed Phoebe Putney’s lone hospital competition in the Albany market.


This article has been updated to reflect clarification on the 340B program’s requirements for use by patients.





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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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