Office of Pharmacy Affairs gains access to 340B data

November 21, 2005

The government agency responsible for overseeing the 340B Drug Discount Program again has the power to access data on the drug prices charged to healthcare providers who serve underprivileged communities, following an intervention by Senator Chuck Grassley (R, Iowa).

The government agency responsible for overseeing the 340B Drug Discount Program again has the power to access data on the drug prices charged to healthcare providers who serve underprivileged communities, following an intervention by Senator Chuck Grassley (R, Iowa).

In Sept. 1 letters, Grassley appealed to Michael Leavitt, the secretary of the U. S. Department of Health & Human Services and Health Resources & Services Administration, to give the HRSA Office of Pharmacy Affairs access to pricing data from the Centers for Medicare & Medicaid Services to show that 340B prices were indeed discounted.

"The Office of Pharmacy Affairs, as of Oct. 1, will compute the quarterly ceiling price. We're hopeful this will make everything more expeditious," said David Bowman, spokesman for HRSA.

Though the move to give the Office of Pharmacy Affairs those pricing data is a step in the right direction, advocates for public hospitals said that more work needs to be done to ensure that the proper prices are being charged for the drugs. Even with the Office of Pharmacy Affairs having access to the data, individual pharmacies have no way of knowing whether the prices they pay are fair.

"Getting the data is a good first step, but there's a lot more work to be done," said Ted Slafsky, executive director of the Public Hospital Pharmacy Coalition. "We've been pushing for years for more transparency. We think that members should have access to a password-protected Web site that would allow them to check on pricing to see if they're getting the right price for 340B drugs."

Indeed, Slafsky said his office is regularly contacted by pharmacies concerned that the 340B prices are inflated, particularly when the cost of buying medications through traditional group purchasing organizations (GPOs) is lower than the discounted 340B price. While there are often good reasons that the 340B price could be higher, Slafsky said, the lack of transparent pricing data makes it hard for pharmacies to assess whether they are being overcharged.

Adding to the uncertainty is the reluctance of 340B providers to file formal complaints when they only suspect a problem. "For over a decade, I could only say, 'This price looks right to us' or 'This looks wrong to us,'" said Don Davies, pharmacy value analyst at Indiana's Clarian Health Partners. "There's very little guidance on even how to file a complaint."

Davies said he would like to see an easier way to bring suspect prices to the attention of the feds without officially accusing a drugmaker of wrongdoing, suggesting that efforts to speed up the process could help reduce overcharging for drugs.

Still, Davies cheered the Office of Pharmacy Affairs' new ability to see pricing data, calling it "step 1 out of 10 or 15 steps" to a well-functioning system.

In addition to the lack of transparency, Slafsky said that enforcement of the pricing rules is lax, and pharmacies have little power to force the government to investigate apparent cases of overcharging. "HRSA needs to have stronger enforcement in place to combat overcharging and ensure that when a pharmacist suspects that he/she is getting overcharged, the government follows up on that."

Without pricing data, the Office of Pharmacy Affairs has been unable to exercise any enforcement, and the lack of action on past cases-including three cases cited by Grassley in which drug companies acknowledged overcharging but have not yet made agreed-upon payments to 340B providers-underscores the need for more aggressive oversight. "Now is the time for the government to do a better job and the pharmaceutical industry to do a better job," Slafsky said.