On July 18, 2017, the House Energy & Commerce’s Oversight and Investigations Subcommittee held a hearing on “Examining HRSA’s Oversight of the 340B Drug Pricing Program.” The hearing featured a single panel of three federal government witnesses, including representatives from the HHS Office of the Inspector General (OIG), the Health Resources and Services Administration (HRSA) and the Government Accountability Office (GAO).
The hearing, led by Subcommittee Chairman Murphy (R-PA), focused mainly on Members’ concerns with HRSA’s ability to conduct effective oversight of the 340B program, especially in light of the program’s recent growth. Witnesses were also questioned on HRSA’s efforts to address recommendations made by GAO in its 2011 report. Key oversight concerns raised by Members included the following:
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Impact of Program Growth on HRSA Oversight: In his opening remarks, Chairman Murphy stated, “HRSA indicates that as of October 2016, 12,148 covered entities were participating in the 340B Program. Despite that growth, HRSA maintains only 22 staff to oversee the 340B Program and conducts roughly 200 audits per year. While HRSA has increased the number of audits conducted annually, which the committee applaud HRSA for, that number is still dwarfed by the vast number of participating entities and manufacturers.” In questioning the witnesses, multiple Members raised similar concerns about HRSA staffing levels.
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Program Reporting Requirements – Transparency Concerns: Members expressed concerns about HRSA’s inability to report on how covered entities use savings from the program. In response to multiple questions on this issue, the HRSA witness stated that “the statute is silent” regarding how the savings are used.
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HRSA Annual Audits: Members expressed concern regarding the “high level” of non-compliance with program requirements by covered entities. In summarizing the audit data, Rep. Walberg (R-MI) stated, “In 2016, of the audits that have been completed so far, 66 percent show noncompliance. Those numbers are just staggering.” Regarding HRSA audits of drug manufacturer program participants, Rep. Castor (D-FL) noted that, “HRSA has already audited a third of hospitals in the 340B Program but only a small fraction of the drug manufacturers.”
The broader issue of prescription drug pricing was also raised by multiple Members, with Committee and Subcommittee Ranking Members Pallone (D-NJ) and DeGette (D-CO) urging the Committee to hold investigative hearings on the issue. In his opening statement, Rep. Pallone stated, “while I was always happy to have a conversation about strengthening the 340B Program, it would be disingenuous for anyone on this committee to say that this hearing today is in any way a hearing on rising drug prices.”
A link to the hearing and accompanying documents may be found here. A link to the GAO Testimony Report may be found here.
