NC treasurer claims cancer patients overcharged, hospitals call allegation 'false picture'

Teachers and other state employees' health care is in trouble, according to North Carolina Treasurer Dale Folwell, and he’s calling for reforms to save it.

Folwell is taking aim specifically at one of the largest drug discount programs in the nation, that, he says, is being abused. It’s called the 340B program.

It lets hospitals buy drugs at a discounted price if they provide a certain amount of care to people with low income.

But Folwell says right now, those discounts are benefiting hospitals, not patients.

His office released a report on Wednesday that claims hospitals across the state are overcharging for cancer drugs.

"This is like an onion, the more we peel the more we cry," Folwell said at a press conference to release the report.

Analyzing pricing statistics for only six oncology drugs, the report showed what hospitals participating in the 340B program charged cancer patients for drugs.

WakeMed reportedly charged patients the smallest markup over the average sales price.

UNC Health charged about twice the cost.

Duke University Health about four times.

Cape Fear Valley Health in Fayetteville allegedly charged patients more than eight times the average sales price.

“The discounts should be passed on to the patients,” Folwell said.

Hospitals say the money they save on drugs through 340B does benefit patients and is used to help fund programs and care for low-income families.

A statement from WakeMed read in part:

“As the area’s largest safety-net hospital, WakeMed provided more than $364 million in charity care for the uninsured and underserved last year. The 340B program allows WakeMed to continue to serve our community and deliver on our mission to care for all – it helps make what we do possible.”

The North Carolina Healthcare Association also released a statement reading in part:

“Once again, the Treasurer is painting a false picture about the mission-driven care provided by North Carolina hospitals. The 340B Program helps safety-net providers serving vulnerable communities stretch scarce federal resources as far as possible to support essential services for their communities. The program is paid for with drug discounts, not state or federal tax dollars… In 2022, North Carolina hospitals alone provided nearly $6.12 billion in community benefits. At the same time, drug companies are not required to report information about how they set their prices or how much they decide to increase their prices. That type of information would be important in understanding drug companies’ pricing decisions and how we can mitigate arbitrary and egregious price increases for drugs that are critical and lifesaving for patients. 340B savings help fund a variety of services that might otherwise be unavailable to North Carolinians including improving access to medication and healthcare services for vulnerable communities; 24/7 access to emergency services in rural communities; community outreach programs; cancer treatment; OB/GYN services; mobile treatment clinics for underserved areas; diabetes education and counseling; and medication therapy management.”

To be clear, there is nothing in the report to indicate the hospitals are breaking any rules.

Right now, there is a national conversation about 340B because it has been controversial.

Congress has been working on reform this year, but that’s still in progress.

Folwell said another major part of keeping the state health plan solvent is for the General Assembly to properly fund it.