WASHINGTON – Colorado U.S. Rep. Diana DeGette led Democrats’ concern Tuesday over a Republican effort to cut subsidies for a drug discount program that serves at-risk persons.

She said during a congressional hearing that a Trump administration proposed rule to cut reimbursement for the 340B program is misguided.

Pharmaceutical companies should be investigated for skyrocketing drug prices instead of depriving medical patients who lack resources to pay for medication, she said.

“Rather than rolling up its sleeves and attempting to address the actual causes of high drug prices, the Administration’s proposed rule instead threatens to undermine the important safety net mission of 340B hospitals,” DeGette, D-Denver, said during a hearing of the House Energy and Commerce Oversight and Investigations Subcommittee.

DeGette is the ranking Democrat on the subcommittee.

Congress organized the 340B Drug Discount Program in 1992 to serve groups that have a heightened need for sometimes costly drugs. They include children’s hospitals, rural hospitals and cancer hospitals exempt from Medicaid reimbursement.

Many of the patients lack health insurance.

The 340B program requires pharmaceutical companies to offer outpatient drugs to eligible health care organizations at reduced prices, which could be as much as a 30 percent discount.

After purchasing the discounted drugs, hospitals can bill Medicare and other insurers at their regular price. The hospitals keep the difference.

In Colorado, hospitals participating in the 340B program include Denver’s St. Joseph Hospital, which is part of the SCL Health network. SCL operates seven hospitals in Colorado and others in Kansas and Montana.

The Government Accountability Office recently raised alarms that inadequate oversight of the program meant it was being abused and not as effective as Congress intended.

Last week, the Centers for Medicare and Medicaid recommended a dramatically reduced government reimbursement rate for 340B drugs.

The Trump administration and some Republicans argue that market competition without the 340B program could reduce drug prices.

DeGette and other Democrats on the Oversight and Investigations Subcommittee disagreed.

DeGette said the Trump administration proposal “would do nothing” to end high drug prices. She said the proposal “seems more like fantasy than reality.”

A better option was improved oversight of the 340B program, she said.

In addition, “I think we need a robust series of hearings that explores, in depth, the reasons for the exorbitant cost of drugs and why their prices continue to rise,” DeGette said.

Republicans like Rep. Tim Murphy (R-Pa.) said the 340B program has grown dramatically but participating hospitals sometimes are financially untrustworthy.

The Department of Health and Human Services estimates the program has saved hospitals about $6 billion since it started. Between 2011 and 2017, the number of participating health care organizations rose from more than 3,200 to more than 12,100.

“There are instances of errors and misuse,” Murphy said.

He told about one case in which a doctor referred 16 young breast cancer patients to a 340B hospital because they could not afford more expensive treatment elsewhere.

Instead of receiving treatment, the women were place on a wait list, Murphy said.

When the referring doctor investigated, he found that “the hospital chose to set a cap on the number of uninsured patients it would treat,” said Murphy, who is chairman of the Oversight and Investigations Subcommittee.

Only about 200 of the 340B hospitals are investigated each year but 63 percent to 82 percent violate regulations of the program, he said.

However, “No one has ever lost 340B eligibility because of these problems,” Murphy said.

Erin Bliss, a Health and Human Services assistant Inspector, testified that oversight improvements have been made in the 340B program but “some long-standing, fundamental vulnerabilities persist.”

One of the vulnerabilities is a “lack of clarity” about program rules “that creates uncertainty and results in uneven program implementation,” Bliss said in her testimony.

She also said, “The lack of transparency in Medicaid claims for 340B-purchased drugs hinders states’ efforts to pay providers correctly and to claim correct Medicaid rebates from manufacturers.”