Some North Carolina hospitals used a program called the “Federal Safety-Net 340B Drug Pricing Program” to “enrich themselves rather than to serve vulnerable communities,” according to a press release sent out on Tuesday, May 7 by NC State Treasurer Dale Folwell.

Folwell announced that he’s holding a press conference at 10:30 a.m. on Wednesday, May 8, to provide details about what he says is obvious misconduct in the medical community.

The 340B Program was set up to help safety-net providers offer service to low-income patients and rural communities. However, according to Folwell, the program has become “the second-largest federal prescription drug program in the nation.“

Under that program, hospitals can buy most outpatient drugs with an average 35 percent discount from drug manufacturers.

Despite that, 340B hospitals have no legal obligation to pass those discounts on to their patients or to invest the savings in care for vulnerable communities.

Folwell wants to see that law changed.

Folwell, who will release an extensive report on his findings Wednesday morning, stated that 340B hospitals charged state employees “massive markups” for oncology drugs.

 That meant that state hospitals generated oversized profits per claim on cancer drugs paid for by the North Carolina State Health Plan for teachers and state employees.

Folwell is calling for state and federal lawmakers to reform the drug pricing program by increasing transparency and accountability. He’s also urging state lawmakers to secure hospital price relief for cancer patients, state employees and others in the state.

Folwell invited researchers to analyze State Health Plan medical claims data on outpatient oncology infusion drugs as part of the broader Hospital Transparency Project – and those researchers found that North Carolina hospitals pursued “greater profits at the expense of vulnerable communities and impoverished patients.”

 According to Folwell, state hospitals neglected to respect the clear intent of the 340B program.