GAO Sets Their Sights on 340B and Medicaid Drug Rebate Programs

If drug manufacturers want certain drugs covered by Medicaid, they must participate in both “340B” and Medicaid Drug Rebate programs. The 340B program allows certain hospitals and clinics to buy discounted drugs. The rebate program allows state Medicaid programs to request manufacturer rebates on certain drugs dispensed to their beneficiaries.

Drugs that hospitals and clinics buy through 340B can’t also qualify for Medicaid rebates—as that would create a duplicate discount.

In a new report, GAO found that limitations in the Department of Health and Human Services’s oversight of the 340B and Medicaid Drug Rebate Programs may increase the risk that duplicate discounts occur. To fight this issue, GAO recommends:

  1. CMS ensure that state Medicaid programs have written policies and procedures that are designed to prevent duplicate discounts and forgone rebates; and
  2. That HRSA incorporate covered entities’ compliance with state policies into its audits, and
  3. Require covered entities to work with manufacturers regarding repayment of identified duplicate discounts in managed care.

Click here to read a summary of GAO’s findings, and click here to read the full report.

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