February 12, 2010 – Much can happen to the federal budget between now and when congressional appropriations committees decide this fall how much each agency will receive. This may be especially true at a time when Congress is taking a hard look at the nation’s soaring deficit.
But if President Obama has his way, the chronically underfunded Office of Pharmacy Affairs will more than double its operating budget during fiscal year 2011, from $2.2 million to $5.2 million.
The U.S. Health Resources and Services Administration (HRSA) asked for the additional funding in its 2011 budget request, saying the money will be used to “sustain annual verification of all covered entities ensuring accuracy and integrity of the 340B database over time.”
The higher budget would also help the agency meet requirements to ensure that their electronic and information technology is readily available to people with disabilities.
Database remedies long overdue
Drug manufacturers use the OPA database to determine whether providers that seek the discounted drugs are eligible 340B participants. In 2004, two reports published by the U.S. Department of Health and Human Services’ Office of Inspector General criticized HRSA for failing to ensure that the information on the database is kept up to date. It also criticized OPA for failing to ensure that providers in the program received the right discounts from drug makers, and said the agency lacked a process for detecting and resolving overcharges.
Since then, OPA has taken steps to improve the integrity of its database, for example by purging some duplicate and obsolete provider records. In 2009, the agency received its first line item of $1.47 million, followed by $2.2 million in fiscal 2010, to allow the database corrections to speed up.
Continued and enhanced funding to $5.2 million in fiscal 2011 is “necessary to continue these major improvements in the 340B Program operations and to resolve identified deficiencies which cannot be addressed with the resources available for normal administrative operations,” HRSA wrote.
Also on OPA to-do list if the proposed funding is appropriated for the new fiscal year that begins Oct. 1:
- Publish policies for how the government should compute 340B ceiling prices.
- Make quarterly comparisons of 340B ceiling prices and the selling prices offered by manufacturers and wholesalers.
- Follow up whenever issues arise in the data supply chain.
- Assess the need for resources to perform audits and levy fines and civil penalties for violations against the 340B law.
While the amount requested by the Obama administration is unprecedented, it’s unclear whether Congress will give OPA what the president asked for. Over the past few years, lawmakers have repeatedly expressed concerns to HRSA about proposed guidelines that would narrow the definition of patient under the 340B program. Even though they asked HRSA to withdraw the controversial guidelines, the agency has yet to follow through.
HRSA estimates that the 14,000-plus facilities participating in the 340B program will save about $2.5 billion on their total outpatient drug purchases of $5 billion. In all, such purchases account for about 2 percent of the total U.S. pharmaceutical market.