Modifications to Inmate Pharmacy Purchasing and Monitoring Could Save $13.4 Million Annually (October 2018)

Pharmaceutical-related expenditures for inmates totaled $72.7 million in Fiscal Year 2016–17, an 88% increase from five years ago. The Program Evaluation Division (PED) found North Carolina’s failure to participate in a federal discount program caused the State to pay more for inmate prescription medications than necessary. Corrections departments in 16 other states have established such arrangements, which could save North Carolina approximately $13.3 million annually. PED also found the Department of Public Safety (DPS) cannot ensure the effectiveness of expenditures for certain high-cost medications that inmates are allowed to keep on their person; does not collect sufficient data to take disciplinary action when medications are lost during inmate transfer; and does not perform adequate data collection and oversight of prescriptions filled at local pharmacies. Finally, North Carolina does not charge inmates copayments for prescriptions; establishing such charges could generate up to $1.5 million annually. The General Assembly should direct DPS and UNC to establish a 340B discount program and direct DPS to require certain high-cost medications not be kept on an inmate’s person; establish controls and collect and analyze data on medications lost during transfer; and develop statewide contracts with retail pharmacies for local medication purchases and develop an oversight mechanism.

Final Report

Executive Summary


Full Presentation with Audio Narration (YouTube)

Presentation of Findings and Recommendations

Report Series Digest

Relevant Legislation:

  • Session Law 2018-143 directs the Legislative Services Commission to contract for a consultant with expertise in the United States Health Resources and Services Administration (HRSA) 340B program to prepare a proposal for the HRSA-compliant purchasing of inmate medications through a Disproportionate Share Hospital (DSH), including, but not limited to, the University of North Carolina Health Care System (UNCHCS); and directs DPS Health Services to revise its policies and procedures to reflect that any supply of a prescription for the treatment of conditions other than HIV with a per supply value of one thousand dollars ($1,000) or more be designated as Direct Observation Therapy; collect data, develop internal controls, establish disciplinary actions, and initiate an internal audit of processes related to medication losses occurring during inmate transfer; and adopt a statewide reimbursement for local purchases of limited quantities of medicine, obtain monthly electronic invoices of prescriptions filled by each prison from the vendor, and establish a formal oversight mechanism to ensure prescriptions written by providers to be filled at local pharmacies do not exceed the quantities specified in the department’s policy.