HHS to Pay Differing Amounts for Cipro
Citing an internal HHS document, the Washington Post today reports that HHS' agreement with Bayer to purchase the antibiotic Cipro calls for the department to pay 95 cents a pill for part of its order and 43 cents for another part, leading some lawmakers and consumer advocates to criticize the deal. The agency will buy the drug for the lower price under a program known as "Section 340B," in which the agency negotiates low prices on drugs for hospitals and clinics that treat low-income people and those in underserved areas. Under the program, administered by HHS' Office of Pharmacy Affairs, the HHS secretary must reach an agreement with drug makers to purchase medications at prices lower than the "average manufacturer price." The HHS document obtained by the Post acknowledged the existence of the "price difference," and cautioned that it should remain undisclosed to the public "given the sensitivity to divulging pricing information." HHS did not comment on the report. Rob Kloppenburg, Bayer's director of communication, "defended the contract" with HHS, saying that Section 340B is a "federally mandated program" in which companies "provide drugs at a price fixed by the government" and have "no control ... even over the quantity." But consumer advocate Ralph Nader accused HHS of "overpaying Bayer [for one part of the order] when they are getting [Cipro] much cheaper in the other program." He added, "There's this double price structure that should not be tolerated. ... You have the same buyer representing the taxpayers of America and the same buyer is agreeing to a two-tier price system for no reason." Rep. Henry Waxman (D-Calif.), ranking member on the House Government Reform Committee, said, "The disparities in Cipro pricing show that drug prices have become so complicated that even the largest purchasers are groping in the dark to try to figure out what is a fair price and what is unreasonable" (Vedantam, Washington Post, 10/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.