February 6, 2014: OIG Issues Report on 340B and Contract Pharmacy Problems: First Report from OIG’s Investigation of 340B Program

Created on: Thursday, February 06, 2014

The Office of the Inspector General (OIG) has initiated an investigation of the 340B drug discount program as part of its 2014 work order. The first report issue examines problems related to drug diversion and duplication within the 340B program related to contract pharmacies.  
This is at the first report from the OIG’s investigation. According to the OIG’s 2014 work order, "Part B payments for drugs purchased under the 340B Program Policies and Practices. We will determine how much Medicare Part B spending could be reduced if Medicare were able to share in the savings for 340B-purchased drugs. We will calculate the amount by which ASP-based payments exceed 340B prices and estimate potential savings on the basis of various shared-benefit methodologies. Previous OIG work revealed that some Medicaid State agencies have developed strategies to take advantage of the discounts on 340B drugs. The 340B Program requires drug manufacturers to provide discounted outpatient drugs to approximately 10,000 covered entities. Medicare Part B reimburses for almost all covered outpatient drugs (including those purchased by 340B entities) on the basis of the average sales price (ASP), regardless of the amount paid for the drug. Medicare Part B providers that purchase drugs under the 340B program can fully retain the difference between the ASP-based payment amount and the 340B purchase price."

Click here to download the first OIG report.

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