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New report claims Cleveland Clinic abuses drug discount program intended for low-income patients

cleveland clinic Ideastream.jpg
Jeff St. Clair
Ideastream Public Media
The 340B Drug Pricing Program allows hospitals to buy medications at a discount, but a recent report found many aren't passing the discounts along to the low-income patients they're intended for.

Pharmaceutical companies say large nonprofit health systems, including Cleveland Clinic, are abusing a federal program that gives them big discounts on drugs for low-income patients.

The 340B Drug Pricing Program allows hospital pharmacies to purchase drugs at a steep discount, charge insurers the full price and keep the difference.

A new report commissioned by a pharmaceuticals trade group determined big systems, including Cleveland Clinic, take advantage of the program through a loophole.

Nicole Longo, of Pharmaceutical Research and Manufacturers of America, said most hospital pharmacies aren't passing the benefits of the program to low-income patients.

“Even though the hospital is buying medicines at a discount, they're not including medicines in their financial assistance programs for their patients," she said.

Hospitals don’t have to report how they spend the money or if they are passing the savings along to low-income patients, Longo explained, adding that hospitals have fought efforts to make their use of the savings transparent.

“It's a lot of money," she said. "Last year alone, sales at the 340B price were over $54 billion, and the vast majority of that went to hospitals.”

Cleveland Clinic said in a statement that it meets the requirements for participation in the 340B program, and that it needs the program to stretch limited resources to provide services to its 230 community-based locations throughout Ohio that also serve the state’s Medicaid patients, Amish population and other rural communities.

Meanwhile, several members of Congress continue to call for changes to the program. A bipartisan group of U.S. senators released a legislative discussion draft in February to update the 340B program.

Taylor Wizner is a health reporter with Ideastream Public Media.