[T]he FDA’s new powers have not relieved cancer patients from these shortages of necessary medicines. In 2012 and 2013, the number of drugs in short supply has hovered around 300, a deterioration of about 20 percent…
The federal government established 340B in 1992 as a way to reduce prices of drugs for inner-city hospitals that serve a disproportionate volume of indigent patients.
Eligible hospitals enjoy a government-dictated discount of 25 percent to 50 percent off the regular price. As described by Forbes contributor Scott Gottlieb, MD, of the American Enterprise Institute, one third of the nation’s hospitals now profit from the scheme, including rich ones like Cedars-Sinai in Los Angeles and Duke University in North Carolina.
Further, according to Dr. Gottlieb, hospitals do not pass this windfall on to patients or the government. Rather, they use the excess profits to acquire oncology practices. As a result, there has been a dramatic increase in the proportion of chemotherapy administered in hospitals rather than more convenient and less expensive oncologists’ offices.
Source: John Graham.