one, two, three. thank you. >> thank you. >> if you missed any of this hearing, you can see it in its entirety at c-span.org type senate intelligence committee in the search bar. we are going to remain live on capitol hill now. the senate health committee is meeting today taking testimony on drug pricing. this is live coverage on c-span3.

>> yeah. it's the intent of the program and this is also in a house report that accompany the legislation was the to enable participating entities known as covered entities to stretch scarce federal resources to provide more comprehensive service. >> that would be like hospitals formatters like that, is that correct. >> federal grantees like federally qualified health centers. >> 19,000 of them as of this year. >> yes, with 46,000 sites. >> the pricing of the pharmaceuticals is done by the pharmaceutical company that sells them to the hospital, providers of the hospitals. is there a middle man they go through? doo threw go through a benefit manager or insurance company or does it go directly to the hospital? >> from the hospital to the. >> yeah, the, the covered entities -- there are certain restrictions how they purchase the drugs. for example, this they can't use

a group purchasing organization because some of the issues around the discounts. they can use prime vendor program to purchase the drugs. >> so there are various ways. >> there are various ways they can acquire the drugs. >>ed you the rules, the pricing is the same no matter what from the pharmaceutical companies? >> whatever the list price is from the company. >> you or possibly miss maxwell made a comment there wasn't enough transparency to be sure whether the program was functioning at optimum intent. i take that meant from the company -- from the pharmaceutical companies justifying the cost they're charging. is that correct. >> yeah, our focus is making sure the full benefits of the program are realized by the providers as well as states. right now they don't have visibility into the prices. >> tell me how do you currently do that in. >> right now, states and providers don't have visibility in what those prices are. they pay what they are charged. >> that's why you use the term trust but verify, correct.

>> correct. >> it seems like we have a problem in search i've system to evaluate it from listening to the testimony of you both that we need to trust but verify the cost but the in by the company and make sure the providers eligible to make the purchases are qualified and delivering it to the intended people. that's what it sounds like to me. we probably need to work on that, mr. chairman, as a committee to help them in the governs of the programs. i yield back the rest of my time. >> thank you, senator. senator murray. >> both your testimonies speak strongly to the great her need for 340b programming integrity. i support the efforts toests insure 340b resources are being used to help safety net providers stretch their scarce resources to serve those in greatest needs as she states was the goal. miss maxwell, did the affordable care act require regulations to make sure drug companies were

charging the appropriate amount or ceiling price for these drugs and to hold them accountable for overcharging. > yes, it did. hearse sa's authority to regulate was upheld in court. >> whether he was that finalized? >> january of 2017. >> so why hasn't it been implemented? since the rule in january 2017, her sa has delayed the effective date multiple times and proposed to delay the effective date to july of 2019. >> so their delay, the trump delay of continuing to implement that is having an impact and i noticed that they delayed it gep last week. the same week as i said that the president said he was cracking down on pharmaceutical industries. so they are not moving forward on this i would assume you would say that? >> yes. >> yes, and in addition to that, the rule delegated enforcement authority to the oig. as a result they have not

received any referrals for enforcement authority and don't anticipate receiving any till the rule finalized. >> dr. draper, your testimony recommends the definition of 340b eligible patient and the criteria for hospitals to be clarified. i believe that needs to be done in a way that strengthens this program and helps so many patients. has hearse sars attempted to address the issues of hospital eligibility and patient definition to insure that the 340b is being printed consistently across the country? >> they have attempted to do it with a 2014 regulation and the guidance that was pulled back in 2017. so still it's still an issue and you know, i think part of the issue, for example, with the definition of an patient there's a lot of the covered entities consider that look at that narrowly and others very broadly. so you have a wide range how that's being interpreted. so for the entities that look at it very narrowly, there could be

patient who's could benefit from the program that are not getting that service because of the narrow definition of how that hospital or entity is interpreting the guidance. >> what happened to the draft guidance? >> it was pulled back in 2017. based on the administration's directive to agencies to pull back any pending regulations and guidance. >> so instead of working with stakeholders to provide more clarity, that guidance that was pulled back and the administration punted again and as i said in my opening remarks, i think that's sabotage and lindering the efforts to improve transparency, accountability, they cut back the program and then argued in last week's drug pricing plan the program doesn't work. so i think that is just not the right approach. i wanted everybody to understand that's what's happening. i wanted to ask one more question. hospitals provide for the community in more ways than

caring for uninsured patients. in my state the university of washington uses the program to help support medical care what they call the 1811 east lake housing project that's for individual who's struggle with homelessness and alcohol abuse. and that care model helped king county save $4 million by allowing those individuals to avoid the more expensive services like the emergency room. we've heard from some stakeholders that better reporting of hospital's 340b savings and the services they provide would reduce the complexity. it would increase transparency and better assure compliance. from your work on 340b, do you think additional reporting from hospitals on their use of 340b savings is helpful for program integrity? >> anyone? >> we are very supportive of program integrity. we think reporting requirements would provide greater transparency. in thinking about responsible reporting we need to weigh that

against the potential provider buffered. . we also think responsive reporting is most valuable if fied to clear program goals. >> okay. what would be the best metric to determine which hospitals are good program stewards? >> i wouldn't be the person to opine on that. just from a program integrity perspective, we find the most value in reporting when it's tied to clear program goals and rules. as we've noted already this program lacks some clarity in the intent of the program. >> dr. draper, what a good metric? >> can you remember the program does not require any reporting of how revenues are spent. and i think anything that enhances the transparency of the program i think it would, you know, enhance the integrity of the program. i also think that's tied to the issue about what is the real intent of the program. i think there's some ambiguity what is the actual intent of the

program. a lot of people think it's a program for low income people. that's not explicitly stated in the intent. >> thank you. >> thank you, senator murray. senator collins. >> thank you, mr. chairman. according to the maine hospital association, 25g mai maine hosp quch for the 340b drug discount program and receive an estimated benefit estimated to be $10 million a year. 14 of those 25 hospitals already have negative operating margins. for some of the other 340b hospitals with positive operating margins, the value of the program represents the difference between a positive operating margin and a negative

one. at the same time, part of what is driving the narrow hospital margins and losses in maine is the growth in pharmaceutical spending, maine hospitals have experienced a 30% increase in drug spending over the past four years. i wanted to give you that background because the hospital association in maine has told me that if we were to limit or eliminate the 340b benefit, it would wipe out the positive operating margins for those hospitals that actually are in the black. ms. maxwell you testified about the lack of transparency to insure that the 340b providers are not overpaying

pharmaceutical manufacturers. what can we do to increase tr s transparency and insure that overpayments are not occurring. >> that's an important question and speaks to a number of our recommendations around transparency. we think the best way is for hearsea to share the ceiling prices with providers as well as states. >> and is there any reason that hearsea is not doing that now? >> in terms of providers, herr sa has the sthoort but they have not made they have not completed their securitied data system. my understanding is that is in progress and may not be completed until the completion and effective date of the ongoing rules about ceiling price. in terms of sharing the information was states, that would require more authority from congress for hersa to be able to share that. >> thank you.

i held a hearing in the aging committee last week on the increase in the price of insulin during the past ten years when it's tripled despite the fact that insulin's been around since 1921. and granted, there are different modifications but once again, we ran into this lack of transparency, and the american diabetes association did a chart that showed the number of middlemen including pharmacy benefit managers, wholesalers, distributors, insurers that are between the manufacturers and the patients and the fact that rebates and discounts often do not get passed on. so when senator sigh sack son was talking about that atlantic transparency in the system and listening to your system, i think that that is a major problem in the pharmaceutical

network, if you will, and it sounds like it's partly an issue here, as well. >> indeed. >> thank you, mr. chairman. >> thank you, senator collins. senator kaine. >> i'm glad we're having this hearing. thanks thanks to the witnesses for being here. miss maxwell i want to talk about one of my critical health care providers, virginia commonwealth university, the largest safety net hospital in virginia. it is an urban disproportionate share teaching hospital and it's representative of the hospitals that could be hurt most by the recent hhs cuts to reimbursements for 340b drugs. 340b savings have allowed vcu to innovate. they've created a managed care program called virginia coordinated care for the uninsured or vcc. it is not insurance coverage but a partnership between vcu and

let care providers to treat qualified uninsured individuals. when congress passed the 340b program, it explained it wanted it to provide more comprehensive services as dr. draper read. statements by the oag and reports a factor in the nearly 30% cut to paints to the 340b hospitals that went into effect in january. >> i'm looking at one of the reports that the oig has done. which is a report dated november 2015 titled "part b paints for 340b purchased drugs." i just want to read from the conclusion. "page 13, it is important to note that our analysis was entirely financial. we did not examine the effect these changes would have on covered entities' ability to serve their communities." so just to be clear, the oig report there one in particular did not examine how the cuts

would affect urban and teaching hospitals' ability to offer more comprehensive services to needy patients. >> the focus of the report was to provide an independent analysis how the savings might be shared across different players. we understood there was a policy conversation happening about the needs to bring down costs and taxpayer funded medicare as well as a need to reinvest in community health sfrpz we wanted to provide the data to help enable that conversation. >> i there that's just an important point to make pore purposes of it making the policy decisions that we have to make, we have to grapple with the cost and efficiencies that are the subject of your reports. however, he we have to grapple with the consequences to patients of cuts and try to balance those out. that's a fair statement, isn't it. >> that's true. it's good to note big policy changes like there change the financial equations and it's possible that hospitals could opt out off 340b all together. if they do that, the discounts are lost to all parties to the

hospitals, to pled care and medicare patients. >> and that would have significant consequences, as well. dr. draper for you, i agree and i think both the chair and ranking member in their testimony talked about the need for transparency and oversight to any government program include this one. in your it, you report that hersa has audited 200 covered entities in 2017 to ensure compliance with the program which is a fourfold increase over the number of audits done in 2014. given the number of covered entities, that sounds like a good thing to do. let me ask this question. how many manufacturers did hersa audit to insure they were in compliance with the program and not overcharging. > according to the website, they audited one and each of 2016 and 2017 they audited five. again on their website, they report they had no findings for the manufacturers its not a systemic process as it is for the covered entities.

>> i would suggest and i think the ranking member got into this a bit in her questions, as well, if we're going to be doing audits if we're going to be systematically auditing the providers we should be systemically auditing the manufacturers. dr. draper, according to your testimony, the gao is preparing additional reports on the 340b program. what are the areas you're examining and when do you think these reports will be ready? >> we have two reports coming out this summer. one is looking at the issue around contract pharmacies so we're looking at the extent to which covered entities are contracting with contract pharmacies and some of the characteristics of those pharmacies. we're also looking at the extent to which discounts are passed on to low income patients or individuals from the 340b program. we're also looking at lersa oversight of the program and including -- we're going to be

delving more into the audits of the covered entities. the fourth thing is looking at finish arrangements between covered entities and contract pharmacies as well as was tpas. there's a cottage industry that evolved around the 340b program. that is something we'll look at, as well with the tpa arrangements. >> excellent. thank you very much. thanks, mr. chair. >> thank you, senator kaine. what arrangement tpa. >> third party administrators. so a lot of those are -- they work with 340b covered entities to help set up and manage their 340b programs. >> thank you. senator cassidy. >> just to follow up on what senator kaine said because if obviously the program is being used as it is to be used to help those lower income folks, that's a good thing. i do want to quote a "new england journal of medicine"

article in which nyu researchers found that if you look at the provision of cancer karat a 340b program versus a non340b program, there's actually fewer lower income patients in that cancer care. so the 340b program which ons tensebly is getting this kiss discount to provide more services statistically is associated with providing fewer services. and there's no significant differences in hospital provision of safety net or inpatient care for low income groups or in more facility at that time among low income residents of the hospital's local service area. if you will, it is an indictment. theoretically, i worked in a 340b hospital. some of them are fantastic and patients at the hospital where i worked that only got medicine because of this program. it seems as if there are some issues with lou it's currently being done. i noticed that consumer groups are advocating for it. let me point out something else.

last week, memorial sloan-kettering's drug pricing lab reported research or made the suggestion that should 340b hospitals be required to provide charity care totally just 1% of their patient revenue, 9% of 340b hospitals would no longer be eligible for 340b. that is if they provided just 1% of their rev fenue for charity care. secondly, i'll point out that if you say the way the business model works is that the more expensive the drug, the greater the discount if the hospital is not returning that discount to the pay or, to the patients or federal government, this he get a bigger spread with a more expensive drug. now, miss maxwell i think i've seen evidence that the incentive

is for the 340b program to use the more expensive medicine because again, that increases their spread. is that reasonable and do you agree with that. >> you know, the work of the ig has not touched on that particular issue. our focus has been primarily. >> let me ask dr. draper. >> we have done a report in 2015 that looked at pled care part b drugs in the 340b program and that work we found that it the 340b hospitals were generally larger, often teaching hospitals. they tended to have a lower overall margin but higher medicare margins and we also found that medicare part b spending at those hospitals was substantially higher than nondish hospitals. so it suggests. >> medicare part b. so the interaction between that and 340b is that 340b would cover the infusion drugs given on a medicare part b billing, correct?

>> yes, if it's an outpatient drug. >> so it is -- so when is you say that the differential is higher, it implies at least that they are use more expensive services or greater intensity o whatever reason, and that would include potentially using more expensive medication? >> it suggests there may be some financial incentives, unintended incentives for prescribing pat snoorns tha rns. >> you mentioned they tend to be larger hospitals. last week researchers published a paper that found among other things prices at monopoly hospitals are 12% higher than in markets with four or more rivals. does the current structure of the 340b program incentivize consolidation? >> we really haven't done work on that. i can't really address that. i can tell you another one of our reports coming out this summer is looking, comparing

characteristics of 340b hospitals and non-340b hospitals and how those characteristics have changed pre and post health care reform. >> that report is pending? >> that will be coming out this summer. >> okay. and then, in 2014, oig published a report that provided useful insight into where the benefits of the 340b discounts were flowing. the agency found few of the hospitals you surveyed, for you, miss maxwell. >> few hospitals said they passed the 340b discount back to the uninsured patient. these are the ones that it's not blue cross, the uninsured patient who can hardly afford their medicine, the personal insulin, filling prescriptions at the hospital's contract pharmacy, in the -- given in the intervening three years no new guidance or regulation with the goal that the patients are the true beneficiaries of the program has been issued do you have any reason to believe that hospitals have begun to pass these savings back to the

uninsured? >> we worked closely with hrsa and let them know about these situations so they were able to address them as they thought appropriate. i don't know whether hrsa did, in fact, reach out and talk to these hospitals about their current policies. >> so you have no indication either way that hospitals have begun to pass them back to the uninsured or they have not? >> that's correct. >> okay. i yield back. thank you. >> senator smith. >> thank you, chair alexander, and ranking member murray and our test fiers today and i want to just start by saying senator isaacson i appreciate your candor in trying to figure out what is going on with drug prices and who pays what and how much and why and sometimes i wonder whether that isn't by design rather than by accident, to tell you the truth. as i struggle to understand this. this is such an important issue in minnesota where senator collins was talking about drug

prices increasing for i think she was talking about overall for hospitals increasing 30% and we wonder why hospitals are struggling to, you know, try to make ends meet. you know, i want to just make sure that what we're talking about in reforms to 340b programs don't hurt safety net hospitals especially in rural areas. i have an example river view health a rural minnesota health system a 25-bed critical access hospital, recently told me that the 340b program has enablds them to stay operational, literally they wouldn't be there without this, as it maintains a level two trauma center for the region and treats an increasing number of people who need health services. they say cutting back on this program, i realize that's not specifically what we're talking about here, every penny we spend comes to patient needs, to senator murray's point this is how we stretch scarce resources. miss maxwell, could you tell us

how you think the proposed changes would affect rural safety net hospitals? >> make sure i understand your question, are you talking about the cuts in part b payments in particular? >> yes, exactly. and also sort of this emphasis on, you know, sort of better, you know, kind of what additional regulatory burden might be placed on small safety net hospitals? >> yes. the cuts to part b are new this year and it's important to address your issue about how they will actually affect hospitals. we will need to monitor that as the implementation rolls out and see if the redistribution of the savings blunts those cuts in any way. i think in terms of the reg naer to burden you're addressing that needs to be taken into consideration. the inspector general is all for greater program integrity and transparency, but we are always cognizant when recommending new reporting requirements of the potential burden on providers to provide that information and how the information will be used to

benefit stronger program integrity. >> right. i think this gets me to the question of, you know, sort of transparency for whom and how does it work and senator collins got to this a little bit and i also think senator murray did. i mean, you know, i'm sort of stunned to understand that, you know, how much drugs are costing, people don't know to the people who are paying for them. i mean it's sort of like saying i'm going to go and buy a car but i don't know how much it's costing and i don't know whether the person standing next to me is buying the same car and is paying more or less. isn't that the fundamental problem here? >> it has been a fundamental issue in the 340 program this lack of transparency a significant issue. >> what is the impact, do you thi think, of not moving forward on the proposed improvement that trump administration has been holding back? what is the impact on that, on

the prices that people are actually paying, do you think? >> what i can refer to is a report we did back in 2005 at that time we looked and saw that 14% of all purchases by 340b entities were over the mandated ceiling price. >> what was that again? >> the -- in 2005, of the total purchases, 14% were over the mandated 340b ceiling price which resulted in $3.9 million overcharges that month june of 2005. we do have evidence that overcharging has taken place. >> that was one month in 2005. >> yeah. >> well, you know, today's hearing is on the 340b program, which is, of course, important and plays an important role in making sure that people can get access to prescription drugs and quality health care at the same time. and i hope that in this conversation, we don't lose sight of the central problem we have which is that prescription drug prices too high and people in my state and all over the

country are choosing between buying the medicine that they need and other essential parts of their life, paying for -- i hear these stories all the time, in minnesota. while i'm grateful i'm glad the president says he wants to tackle these challenges and i hope we can find some common ground. i agree i don't think the proposals laid out last week get at the core problem and i think that great evidence of that was the pharmaceutical company stock prices went up after the president made this announcement. at the same time we have issues with, you know, big drug companies like novartis paying to michael cohen for access to the administration. these are the issues that i think are deeply concerning to people in my state that we have to get to the bottom of. thank you. >> thank you, senator smith.

let me ask during our first hearing on 340b, it became obvious among the witnesses there was some disagreement about statistics, about data, so let me ask you three or four questions and if you don't have the answer right at hand maybe you could provide them to me after the hearing. the office of assistant secretary for planning and evaluation estimated that americans spend $457 billion on prescription drugs in 2015. is that $457 billion accurate for 2015? >> my understanding that is accurate for sales. >> for sales. would you measure it some other way? >> as opposed to net revenues that would incorporate discounts after the fact. >> right. okay. so overall sales. according to hrsa of that $457 billion approximately $12 billion was spent on 340b drugs,

does that sound correct? >> yes. i think that's what medpack reported as well. that was pre-discount i believe. >> correct. i believe it was $16 billion in 2016 and up to $19 billion in 2017. >> yeah. back on 2015, if it were $12 billion spent on 340b drugs, that was an estimated $6 billion in savings for hospitals and clinics covered entities that participate in the program. does the $6 billion figure sound right? >> it does, yes. >> so using those numbers, $12 billion out of $457 billion, that's about 2.6%, so ta would mean that in 2015 the purchase of 340b drugs were about 2.6% of the total drug purchases in the country, correct? >> correct.

according to hrsa, now this is looking at the next year, 340b sales were about $16 billion, or about 3.6% of drug sales in the country, $444 billion in 2016. does that sound correct? >> yes. >> that would suggest that in one year, sales in the 340b program increased by about 33%. according to the government accountability office, hospitals, clinics and affiliates, and you testified some to this, participating in the program nearly doubled from about 20,000 in 2014 to nearly 40,000 in 2017. is that correct? >> yes. over the past five years hospital coverage sites increased 175% and federal grantee sites increased about 40%. the growth is really primarily disproportionate in the hospital sites. >> would you both agree that it

would be hard for us to do anything else until we clarify the intent of the program? >> i think clarifying the intent of the program would go a long way to establishing what the guidance needs to be and, you know, it will help to create -- the guidance needs to happen to create the transparency and the enhancing right now there's a lot of ambiguity as to what program rules are. >> miss maxwell? >> i would agree. clarity in the program goal as well as clear program rules are the foundation of a strong program integrity strategy. >> in our previous hearing it was pretty clear that we could not tell in all instances on what the covered entities were spending their money, and other conversations since then, i've had hospitals say to me we're glad to tell you.

is it true that because of the way clinics are supervised we know more about how they spend their money than hospitals or any reason why we shouldn't ask hospitals and clinics covered entities to tell us how they spend this $6 billion. if it goes to help individual patients reduce the price of a specific drug, that's one thing, if it goes for some other purpose, which it could, and does, it's maybe a worthy purpose, that's another thing. is there any reason not to ask for that information? >> well, the underlying issue it's not a requirement of the program that entities have to report how they spend their money or what they use their revenues for. >> yeah. >> for some of the federal grantees their grant requirements may require them to spend the money in a certain way. >> as a matter of policy, i mean, so it doesn't require that? >> no. >> but it would seem to me we could do a better job of oversight if we knew that?

>> i think it's somewhat dependent on the sophistication of the entity and what type of data systems or other systems they have to put in place to monitor that. but i think it's something that certainly should be explored because this is another issue that, you know, there will always be questions about the integrity of the program if that information is not available. >> yeah. we're not clear about the intent of the program and that information isn't available it makes it difficult to oversight. >> you know -- >> my time is up. >> sorry. i was going to say, you know, people have a lot of interpretations on what intent of the program is. >> yeah. >> but, you know, it's not really -- that's not consistent with what the, you know, the intent that's the stated intent is. i mean some think it's a program for low income folks and it may well be, but that's not explicit in the intent. i think creating -- deciding what intent of the program would

go a long way to really helping with creating the necessary guidance and regulations that are needed for the program. >> thank you very much. i've run over my time. senator warren is always good about sticking to her time. >> thank you. >> i've set a bad example. >> thank you, mr. chairman. so the 340b program has one basic requirement, that drug companies must provide discounted medications to hospitals and clinics caring for the most vulnerability patients, kids with cancer, the uninsured, under insured, people with hiv and aids. federal law specifies the formula used to calculate this discounted price which is called the ceiling price. in order for the 340b program to work, the ceiling price calculations need to be done correctly. and there need to be consequences when drug companies break the law and deliberately overcharge for these drugs. so let me start there. dr. draper, in 2011 the gao

raised concerns that the 340b program, quote, primarily relies on self-policing that is -- that is participants insuring their own compliance with program requirements. so tell me, why might it be a problem if a drug company is the only one doing these ceiling price calculations and no one is able to check its work? >> so, on the covered entity part that they, you know, the prices are not available to them so they don't know really what -- so the self-policing only works if you have transparency and the information that you need to really self-police. the information is not available to the covered entities. on the other hand, with drug manufacturers, you know, they may, you know, suspect that covered entity is dispensing drugs to ineligible patients but the burden -- they have the authority to audit a covered

entity but a lot of burdens associated with that. it's both ends. overall lack of transparency. >> right. i get your point. i want to start with the premise of how the program is set up to begin with. when it comes to the drug companies, if no one can check their work, they could cheat, charge more for drugs, and no one could catch them when they break the law. there's no way to catch them on this. senator smith started on this issue. so let me ask another part of this. miss maxwell, the oig has conducted numerous analyses of 340b prices. is there evidence that drug companies have overcharged health care providers in the 340b programs? >> yes. there is evidence. >> so, these findings led congress to include a provision in the affordable care act to crack down on this behavior. the aca required the government to create a verification system for ceiling prices and make sure that hospitals and clinics got

refunds if the drug companies overcharge them. now, congress, also established fines called civil monetary penalties that drug companies could be charged if they knowingly and intentionally overcharge a health care provider. miss maxwell, the oig is in charge of enforcing the civil monetary penalties. how many penalties have you assessed to date? >> we've received no referrals and don't anticipate to receiving them until the rule is made effective. >> there was evidence in earlier studies that drug companies have overcharged health care providers, right now you have not received any referrals, and the reason you have not received any referrals because the trump administration has already delayed the implementation of these penalties not once, not twice, not three times, but four separate times since 2017 and

last week they proposed yet a fifth delay. when president trump delivered his big drug pricing speech last week he said that 340b program, a drug discount program, contributes to the problem of higher drug prices and that's one of the parts of the speech where the drug industry lobbyist must have stood up and cheered because here's the thing. if the president is truly worried about the connection between high drug prices and the 340b program, he could start by implementing the law that congress wrote to stop drug companies from cheating on their discounts. no one should be above the law and that includes giant drug companies that are raking in profits while complaining about a program that helps out our most vulnerable patients. thank you. i yield with time. >> thank you.

for your usual succinctness, senator warren. senator baldwin. >> thank you, mr. chairman. i have long worked with a group of bipartisan colleagues in the senate to protect and strengthen the 340b program. in 2013, we called on hhs to consider recommendations from a 2011 gao report, however the administration continues to delay any real action to enhance program operations for all participants and instead, has continued to unfairly single out and target hospitals. aurora, in downtown milwaukee, wisconsin, is one of our 71 hospitals that relies on the 340b program to care for its uniquely vulnerable population. aurora estimates that over 8,000 of its patients have undiagnosed

hepatitis c. with over 37,000 undiagnosed cases in the state. they have used their 340b savings to develop a screening program and to partner with the city health department, a local ryan white clinic, and a nearby community health center to improve community health and better address hepc. aurora recently shared their frustrations with regular instances where drug companies refused to provide them with 340b, the 340b price of a drug. often, the manufacturer will provide no excuse at all or they'll claim that drug is in short supply. this forces the hospital to buy the needed medication at full cost, at which point the drug is

curiously no longer in short supply. gao recommended that hrsa clarify guidance to prevent drug companies from restricting distribution of drugs at 340b prices. while the agency released clarification, hospitals in wisconsin continue to experience these problems. dr. draper, what additional work do you plan to do to examine instances where drug manufacturers refused to provide the 340b price and what other oversight measures could help address this? >> yeah. we don't currently have work under way or have any planned work related to that. however, that's a hrsa oversight issue and if hospitals are experiencing that, they need to work with hrsa to resolve the issue. i mean that was something that we found that our 20 -- well our work that led up to the 2011 report that manufacturers for

drugs that were inherently in short supply they often -- you know, restricted distribution in a way that wasn't always clear between 340b and non-340b hospitals. that is a hrsa oversight and hrsa enforcement issue. i think that hospitals need to work with hrsa to resolve that issue because that should not be happening in accordance with our updated guidance. >> okay. many wisconsin 340b hospitals have also told me about numerous audits that they experienced. not only from their own internal and rigorous self-auditing, but also from hrsa audits as well as audits by the drug companies. your agencies have recommended increasing oversight of drug manufacturers including increasing audits, transparency as well as a dispute resolution process for covered entities to

better obtain information from manufacturerses. but i'm concerned that this uneven playing field between hospitals and drug companies continues to persist, burdening hospitals in the program. dr. draper and miss maxwell, can you explain why your agencies recommended enhanced drug manufacturer oversight such as audits and what gaps remain that the administration has failed to address? >> with respect to our work, the gaps that remain are the visibility into the prices. right now, providers in states do not know if the 340b ceiling prices are. so at this point they just pay what they are charged and we have evidence from previous work that there are overcharges that occur. so we strongly encourage hrsa to complete the data system to share the prices with the providers and also to seek the authority needed to share prices with states.

>> yes. and currently, you know, we encourage oversight of all entities participating in the program, as a result of our recommendation from 2011 hrsa now conduct and 200 audits of covered entities each year. earlier i talked about the -- it's not as a systemic process for manufacturers in 2015, they did one manufacture audit in 2016 and 2017 they did five. there's, you know, we would encourage that there's a process to ensure that all participants in the program are adhering to the program regulations and rules and there's greater transparency. >> thank you, mr. chairman. >> thank you, senator baldwin. i want to thank our two witnesses today for your very helpful comments. you had some questions which you may want to follow up on. the hearing record will remain open for ten days. members may submit additional

information for the record within that time that they would like. our committee will meet again on tuesday, may 22nd, at 10:00 a.m. for a hearing on america's health care work force. the committee will stand adjourned.

[ inaudible ].

>> if you missed any of this hearing watch it in its entirety on our website c-span.org type prescription drugs in the search bar. we have more live programming coming up with the ninth circuit court of appeals the judges will hear oral argument in the case of regents of the university of california v department of homeland security which concerns president trump's decision to end the deferred action and childhood arrivals or daca program. live coverage at 4:00 p.m. eastern here on c-span 3. u.s. house is back this week to take up a five-year farm bill. that includes work requirements for food stamp or snap recipients. debate expecting on that starting as early as tomorrow for the passage vote coming up

friday. in the senate republicans will hear from president trump at the weekly party conference lunch tod today. the president to talk about the economy and his meeting with kim jong-un. on the floor lawmakers set to vote on more of the president's u.s. circuit court nominees. tomorrow debate on a disapproval resolution to reverse the fcc's net neutrality decision put in place during the obama administration. see the house live on c-span, watch the senate live on c-span 2. coming up tomorrow, epa administrator scott pruitt scheduled to testify on his agency's 2019 budget, appearing at a hearing by the senate appropriations subcommittee. live coverage will begin at 9:30 a.m. eastern here on c-span 3. tomorrow fbi director christopher wray testifying on the bureau's proposed 2019 budget. the senate appropriations subcommittee hearing starts live at 2:30 eastern. also here on c-span 3.

>> sunday on "q&a" university of virginia history professor william hitchcock on his book "the age of eisenhower, america and the world in the 1950s. >> i called it the disciplined presidency and eisenhower, in the way he carried himself and the man that he was, was a disciplined man, a great athlete, when he was young, an organized man in every respect, very methodical, but that's how he ran the white house too. he was extremely organized. a lot of people, especially the young senator, future president john kennedy, kind of criticized eisenhower's stodginess for being disciplined and predictable. it meant when crises came he had a plan, knew how to respond, who to turn to. he used to say, plans are worthless but planning is everything. so you're always thinking what's over the hill. what crisis might erupt. we should be thinking about it. so he was very systemic in the way that he governed.

he met the press every week, congressional leaders every week, he did -- he chaired the national security council every week and he had his thumb on the government. he trusted the process. he believed the federal government could work well if it was well led. >> "q&a" sunday night at 8:00 eastern on c-span. connect with c-span to personalize the information you get from us. just go to c-span.org/connect and sign up for the e-mail. the program guide is a daily e-mail with the most updated prime time schedule and upcoming live coverage. word for word gives you the most interesting daily video highlight in their own words with no commentary. the book tv news letter sent weekly, is an insider's look at upcoming authors and book festivals and the american history tv weekly news letter gives you the upcoming programming exploring our nation's past.