Grassley calls for tougher oversight of federal drug discount program

The top Republican on the Senate Judiciary Committee is demanding tougher oversight of a federal drug discount program after learning that it hasn't undergone a single comprehensive audit since its beginning in 1992.

Sen. Chuck Grassley (R-Iowa) requested tougher federal oversight of the 340B program for safety-net hospitals after receiving a reply to his request for more information from the agency responsible for the program. The Health Resources and Services Administration told Grassley that it has referred two cases for outside audit — one to an inspector general, the other to the Justice Department — but hasn't conducted any program audits itself. 

"Those were both very narrow cases," Grassley said in a statement Wednesday. "With the lack of oversight, the taxpayers through state and federal governments could be grossly overpaying for prescription drugs and not know it, and that situation could continue to accelerate. The agency needs to start conducting oversight and keep going."

The 340B program is receiving increased scrutiny because the healthcare reform law expands it to more types of hospitals. The program enables safety-net providers like federally qualified health centers to buy outpatient drugs at a steep discount, even below the regular Medicaid discounted rate.

"This program is growing in popularity," Grassley said. "That will only increase under the health care overhaul law, which increased eligibility. The federal government needs to get a handle on potential abuse before program growth gets out of hand, the taxpayers have to pay for it, and program sustainability is in question."

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