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Sen. Bill Cassidy, R-La., listens during a Senate Health, Education, Labor, and Pensions Committee hearing. -- health policy coverage from STAT — Sen. Bill Cassidy (R-La.) Stefani Reynolds/The New York Times via AP

WASHINGTON — The top-ranking Republican on the Senate health committee is launching an investigation into two hospitals’ use of a government program that provides big drug discounts in return for serving low-income communities.

At the foundation of the debate over the so-called 340B program is whether Congress intended it to directly benefit low-income and uninsured patients or whether it was meant to help finance those hospitals, which could use the money as they see fit to add services.

Hospitals say they use the money to provide such services as free care for uninsured patients, free vaccinations, mental health clinics, and community health programs. But drugmakers have long argued that hospitals and chain pharmacies abuse the program and divert its cash flows to other uses. They also say the 340B program fuels the consolidation of health care systems as hospitals buy up private doctor practices to expand the 340B revenue stream.

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