MDs are getting $4 billion for a VA drug development program that began in 2006 and is expected to cost more than $1 billion.
The program, known as the Medical Manufacturing Investment Program (MMIP), was designed to spur innovation in VA medicine and research by providing loans to small businesses that would provide new drugs and services.
Under MMIP, hospitals and clinics can receive up to $100 million for development of new drugs, vaccines, or diagnostic tests.
The federal government’s Office of Inspector General released a report last year that found the program provided about $2 billion in loans.
“While we appreciate the support of Congress and the President, the program is not in a position to provide meaningful value for taxpayers,” said Rep. Jim Jordan, a Pennsylvania Republican and chair of the House Committee on Veterans’ Affairs, in a statement.
The Department of Veterans Affairs is responsible for the program, which is part of the Department of Defense’s acquisition strategy.
The Office of the Inspector General report said the MMIP program provided the VA with about $1.2 billion between 2006 and 2018, but that it has only received about $5 million from the Department.
The report said “significant amounts” of the money has been used to pay off loans.
For example, the report said VA has received $1,000,000 for its $5.5 million loan, and it has been receiving $5,000 a day for two months.
Jordan also said the VA should be “reluctant” to repay the loans because they could be used to buy up existing drugs and equipment.
The VA has denied that it is in a financial position to repay those loans.
A VA spokesman said the agency is “fully cooperating” with the Inspector Gen. report.
“The VA will continue to work with the Department to determine the best use of our resources,” the spokesman said.
The IG report also said that in the four years that the program has been in place, the VA has taken in $2.4 billion in taxpayer money.
The audit said the loans could be spent on new VA clinics or equipment.
VA Secretary Robert McDonald said in a written statement that the VA is focused on making the loans available for as long as possible, and that the department is working with the IG to address the issues identified.
“Vets, who have already benefited from the program through the medical device and drug grant program, are eager to see it continued,” McDonald said.
“VA has an excellent track record of delivering on its commitments under MMIP.
The loans should be repaid as soon as possible and, as a result, the agency will not be able to use the funds to cover its anticipated costs.”
The VA’s program began in June 2006.
It was designed as a way to encourage new VA medical facilities to develop products and services for veterans, who are more prone to developing chronic illnesses than other veterans.
It also was intended to increase the VA’s ability to develop new therapies and devices for its veterans, especially those with chronic conditions like diabetes.
Since then, the $1-billion program has helped the VA produce $2-billion worth of drugs, medical devices and devices, and medical devices for research and development, according to the report.
It has also helped fund a research program that aims to develop vaccines for more than 300 diseases, the IG report said.
That program, the Inspector Generals report said, is intended to be a key part of developing new drugs for treating people with post-traumatic stress disorder, depression, and PTSD.
The agency said the $2 million for the first year of the program was intended as an upfront funding for research, but it has never been used for that purpose.
VA says the program did not create new VA jobs and said it would only be used for new VA patients.
The inspector general report also found that the loan repayments were largely a result of the VA receiving a smaller number of loans than it was paying on them.
That has led to an imbalance in how much money the agency has borrowed to fund the program compared to what it is paying on the loans.
The average loan repayment in 2018 was $1 million, the inspector general found.
The amount the VA pays back on the debt depends on the type of loan, the type and amount of money that the borrower is taking out, and how long the loan is expected for repayment, the watchdog said.
VA also said it has received more than 50,000 applications for loan forgiveness, but the IG found the number was much lower than the actual number.
The Inspector General said the total amount of loans and repayments for the programs were more than 2.4 million.
The total amount that VA paid back in loans and the amount it repaid on its outstanding debt total $7.9 billion, the auditor general said.