GAO’s Flawed Analysis Paints Wrong 340B Picture

by Holly Russo, RN, MSN, MS, ECS, PatientCraft CEO

Last month, the Government Accountability Office (GAO) issued a critical report on the 340B program. GAO interviewed 61 stakeholders in the program about their ability to generate savings and distribute drugs. GAO also examined the adequacy of federal oversight of the program.

The main thrust of the report is that 340B needs better federal oversight, identifies areas of the program that need clarification and warrant discussion. But the government should not act upon the findings because the review was flawed and undermined by sampling bias and size.

My first takeaway from the report is that existing technological solutions would simultaneously provide transparency within the 340B program and ensure adherence to it. These technologies can help entities make informed decisions while reassuring the government that the industry is meeting standards.

The report raises questions about how two organizations utilize the program. Unfortunately, GAO never specifically cites an example of 340B being abused; it just insinuates problems in a prescriber area that causes much confusion, with some entities interpreting it too narrowly and others too broadly. The government could alleviate this concern by clarifying its intent.

GAO also raises concerns about access of covered entities for certain drugs caused by drug shortages, but the agency offers no real strategies to address this issue.

Despite a small sample size and a bias in interviewee selections, the report makes some valid observations. Many covered entities are using savings gained through the 340B program to either provide access to services, increase services available, subsidize care for the uninsured or just simply keep their doors open.

However, only 13 of the 20 entities interviewed — or roughly 60 percent — are generating savings. That does not fairly represent participants in the program.

GAO falls short of actually saying there is a real problem with diversion, duplication, discounting and overcharging by manufacturers. Rather, it makes rash generalizations without sufficient data to support the claims.

Programs like 340B are not perfect, but they provide an important service to our under-insured and uninsured citizens. I hope that future GAO studies will include larger sample sizes and will not operate under the impression that the program is inherently flawed