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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Comprehensive Hemophilia Treatment Centers' Utilization of the Public Health Service 340B Drug Pricing Program," (A-01-98-01505)

December 10, 1999

Complete Text of Report is available in PDF format (818 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final report points out that improvements are needed to ensure that all State Medicaid Agencies benefit from the price advantages available to Public Health Service (PHS) grantees under the PHS 340B Program (340B Program). The objective of this audit was to determine whether comprehensive Hemophilia treatment centers (HTCs) participating in the PHS 340B Program were participating for all of their patients, including Medicaid beneficiaries. Officials from 6 of the 23 participating HTCs contacted stated that their entities participate (purchase outpatient drugs at the 340B discount price), but not for their Medicaid beneficiaries. For one selected center, we determined that a State Medicaid Agency could achieve annual savings ranging from $18,395 to $27,170 per person if it reimbursed the HTC at the 340B discount prices instead of the Medicaid rate. We recommended that the Health Resources and Services Administration (HRSA) and the Health Care Financing Administration (HCFA) work together to achieve a fair and equitable resolution of the issues involving the economical purchasing, and subsequent Medicaid billing, of covered drugs by entities participating in the 340B Program. Officials in HRSA and HCFA concurred with our recommendations.