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Proposed Review of 340B Drug Discounts Irks Hospitals

John Commins, for HealthLeaders Media, March 26, 2014

Contending that hospitals taking advantage of mandated lower drug prices should be held accountable for the levels of charity care they provide, a group funded by the pharmaceutical industry is getting pushback from two major hospital associations.

A group funded by the pharmaceutical industry wants Congress to review the 340B outpatient drug discount program to ensure that hospitals aren't gaming the system.

The Alliance for Integrity and Reform of 340B says in a report out this week that "a substantial portion" of hospitals that have enrolled in the 340B program don't provide enough charity care to justify their discounts and may not be living up the spirit and intent of what Congress envisioned when the program was created in 1992.  

AIR 340B spokesperson Stephanie Silverman says her group does not want to see the 340B program abolished, but does believe that hospitals taking advantage of the mandated lower drug prices should be held accountable for the levels of charity care they provide.

"When a program expands well beyond its original intent, there are legitimate questions about sustainability. For hospitals that are doing the right thing, we don't want to jeopardize their program," Silverman said.

"The concern is for those that don't want to be on the hook for colleagues in the industry who are not deploying the resources appropriately. There is always a threat, which we are not advocating, of throwing the baby out with the bathwater. We are trying to define where the bathwater is."

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