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340B Drug Program Lacking Oversight

May 15, 2018

Pursuit's Take

The 340B Drug Pricing Program requires drug manufacturers to sell outpatient drugs at discounted prices to covered entities—eligible clinics, hospitals, and others—in order to have their drugs covered by Medicaid. Only covered entities and eligible patients are allowed to participate. However, the Government Accountability Office (GAO) found issues with the program’s oversight. GAO found that the Health Resources and Services Administration’s (HRSA) oversight of the 340B Program was weak because it relied on entities and manufacturers to ensure their own compliance with program requirements. GAO recommended more oversight in 2012, which HRSA complied with, but at a slow pace. HRSA only audits 200 covered entities a year, which is less than 2 percent of entities participating in the 340B Program. GAO also found that HRSA lacks clarity on two issues: who is an eligible patient, and who is an eligible entity.

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