Drug companies and hospitals are gearing up for a big battle on Capitol Hill over the future ofthe 340B Drug Pricing Program, the 25-year-oldprogram aimed at helping hospitals serving low-incomecommunities.
The program, which was signed into law by President George H.W.Bush, requires pharmaceutical companies to offer discounts on drugsto hospitals that serve a disproportionately large number oflow-income patients. Medicare in turn reimburses the hospital forthe market rate of the drug plus 6 percent.
The idea behind the program is that the hospital will use thesurplus from the Medicare reimbursement to invest in other criticalneeds. However, critics have alleged that there is littleaccountability over the use of the extra money and that hospitalsmay very well be using it merely to pad salaries or profits.
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