HHS report: Five drug companies overcharged ADAPs

By Advocate.com Editors

Originally published on Advocate.com March 28 2003 1:00 AM ET

A new report by the Health and Human Services Office of the Inspector General charges five drug manufacturers with overcharging AIDS Drug Assistance Programs, community health centers, and other safety net providers, Reuters Health reports. The report claims that the companies, which are not identified by name, overcharged the various groups by $6.1 million in 1999 for 11 drugs, which also weren't mentioned by name. All of the providers are participants in the U.S. Public Health Service's 340B program, a drug discount program that allows hospitals, ADAPs, and community health clinics to purchase drugs at the lowest price available. The inspector general's investigation found that the drug manufacturers failed to include in their calculations of the drugs' best price the price of the drugs sold to HMO "repackagers," which buy drugs in bulk and then repackage them in smaller quantities for distribution. The companies charged clinics and programs about $13.7 million for the 11 drugs in question when the final price tag should have been $7.6 million. The report recommends that the Centers for Medicare and Medicaid Services require the companies to report the extent of the overcharging for the drugs and to develop a refund or credit plan for the providers.