Government Accountability Office Reports that 340B Program Needs Greater Oversight

Pursuant to a mandate in the Affordable Care Act, the Government Accountability Office (GAO) recently completed its review of the 340B Drug Pricing Program, which allows certain health care entities such as federal grantees and hospitals to receive discounted outpatient drugs. There are currently over 16,500 entities that participate in the 340B program.

According to the GAO’s report, health care entities receiving the 340B discounts reported that they were generating revenue that exceeded drug-related costs, though several entities said that their revenues did not exceed their drug-related costs. Nonetheless, the GAO found that the Health Resources & Services Administration—the arm of Health & Human Services responsible for administering the program—provided insufficient oversight to ensure that the 340B program was being properly administered. The report found that clear direction was lacking, that oversight did not ensure that drugs purchased at the discounted prices are only transferred to eligible patients or that manufacturers are selling the drugs at the appropriate price; and that the number of hospitals participating in the 340B program heightened the need for greater oversight.

Read a full copy of the GAO’s report here.

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