The Obama administration and HHS Secretary Sylvia Mathews Burwell have admirable goals for our nation's healthcare system: greater provider collaboration; prevention and keeping people well after a hospital visit; payments that reward quality and care coordination; broad access to equitable care for the vulnerable.
But in working toward these goals, Burwell might be fighting a headwind of her department's own making.
That challenge comes in 25 Federal Register pages of proposed omnibus guidance for the 340B Drug Pricing Program published last August by the department's Health Resources and Services Administration. This dark cloud of regulatory guidance not only hangs over the 340B program, but could undermine administration initiatives to reduce hospital readmissions, expand access to care, and tackle social determinants of health that plague vulnerable populations.
The 340B program, created by a bipartisan Congress nearly a generation ago, is a precursor to headline efforts today to rein in the excesses of the pharmaceutical industry. The wonky name belies the program's simple function: It requires drugmakers to give eligible providers discounts on outpatient drugs as a condition of receiving Medicaid and Medicare Part B payments. Eligible providers include hospitals, community health centers, AIDS clinics and others that care for the most disadvantaged and underserved patients.
The program works well, complies with existing regulations, meets Congress' explicit original intent to help providers “stretch scarce federal resources,” and, in Washington budget terms, costs taxpayers nearly nothing.
But in responding to calls for greater transparency and accountability for 340B, HRSA took an unnecessarily onerous tack. Rather than a measured approach to strengthen an otherwise properly functioning program, the agency proposed a fundamental reshaping of 340B by rewriting how it defines eligible patients and facilities.
What might seem like technical changes would, in fact, significantly narrow the program's scope and leave many vulnerable people without lifesaving drugs. They also squarely conflict with administration goals for system transformation.