Big Pharma: Pot, Meet Kettle

Big Pharma needs to take a good look in the mirror. After years spent accusing hospitals in the 340B Drug Discount Program of mismanagement, a new report paints a very different picture.

At issue is “diversion,” when a hospital provides a 340B discount to a patient that’s not eligible; and “duplicate discounts,” when a hospital receives both a 340B discount and a Medicaid rebate on the same drug. For a decade hospitals have been regularly audited by the Health Resources and Services Administration, often at the request of drug companies. On average, two hundred hospitals are examined each year. Drug companies are also audited for compliance under the law – but at a much lower rate of just five annually.

A recent analysis of federal audit data by the American Hospital Association shows hospitals improving dramatically. “Duplicate discount and diversion findings in 340B hospital audits have declined significantly, reflecting very high rates of compliance in recent years. Between FY 2018 and FY 2022, 340B hospital audit findings for duplicate discount and diversion decreased by a combined 62.1 percent.”

The analysis also revealed a dirty little secret that Big Pharma would rather sweep under the rug and ignore: Findings against Pharmaceutical companies soared during the same timeframe. “There was a total of 30 audits conducted for drug companies between FY 2018 and FY 2022 with 60 percent of these audits having at least one adverse finding. Of those drug companies, 93 percent were required to issue repayments to [hospitals], underscoring a pattern of noncompliance."

Safety-net providers work tirelessly to care for America’s underserved patients – and they’re diligent about managing the program correctly. Big Pharma is failing to comply with the law and abusing America’s safety-net providers. They won’t tell you that. We just did.