Senator Charles E. Grassley (R-IA), ranking member on the Senate Judiciary Committee, has sent letters to three non-profit hospitals in North Carolina after recent articles published in two state and local newspapers announced the results of an investigation allegedly showing that these hospitals’ negotiated insurance rates are generating large profits on chemotherapy drugs purchased through the 340B drug discount program.  The 340B drug discount program ensures access to discounted outpatient drugs for covered entities.  Senator Grassley’s inquiry letters request, inter alia, information on the hospitals’ charitable care policies and the extent to which 340B savings have been reinvested by the hospitals for the benefit of uninsured patients.

Each of the inquiry letters alleges that:  

. . . [W]hen selling these deeply discounted drugs, [the hospital] does not seem to be passing those savings on to its patients.  Instead, the 340B discounts appear to be simply subsidizing its bottom line operating margins. . . . If ‘non-profit’ hospitals are essentially profiting from the 340B program without passing those savings to its patients, then the 340B program is not functioning as intended.

Senator Grassley’s letters are available by clicking here.  The September 22, 2012 News and Observer article is available on the newspaper’s website.  The September 24, 2012 Charlotte Observer article is available by clicking here here.