by admin | March 4, 2014 4:33 pm
March 4, 2014—The Obama administration is seeking $17 million for the 340B drug discount program in fiscal 2015, consisting of $10 million in appropriated funds and $7 million from a 0.1 percent user fee on 340B drug purchases. [ms-protect-content id=”2799″] The request came today in the President’s proposed budget for the coming fiscal year.
The administration’s Budget in Brief booklet for the Department of Health and Human Services (HHS) states that the 340B user fee revenues “will help improve the program’s operations, oversight, and integrity.”
Congress passed a consolidated appropriations bill for the current fiscal year in January that more than doubled the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs’ (OPA) budget, from $4.4 million to $10.2 million. Lawmakers directed OPA to use the funding boost to strengthen program oversight. OPA reportedly briefed the House and Senate appropriations committees late last month on how it intended to use the money. Details might be available later today in HHS budget supporting documents.
The administration has proposed a 340B user fee for the past several years. The idea has drawn some support in the Senate but little to none in the House. With control of Congress divided and midterm elections in November, not much of the President’s budget is expected to be enacted.
The administration’s budget also includes proposals on the following:
Medicare DSH percentage. The administration wants to clarify that individuals who have exhausted inpatient benefits under Medicare Part A or who have elected to enroll in Medicare Part C plan should be included in the calculation of the Medicare fraction of hospitals’ disproportionate share hospital (DSH) patient percentages. This would effectively reduce some hospitals Medicare DSH adjustment percentages and, in so doing, disqualify them from 340B.
Medicaid drug rebates. The administration proposes to further clarify the definition of brand drugs for Medicaid drug rebate purposes; to collect an additional rebate for generic drugs whose prices grow faster than inflation; and to include certain prenatal vitamins and fluorides in the rebate program.
Critical access hospitals. The president proposes to reduce CAHs’ enhanced cost-based Medicare payments from 101 percent of reasonable costs to 100 percent, and to prevent hospitals that are within 10 miles of another hospital from maintaining designation as a CAH.
Part B drug reimbursement. The administration wants to reduce reimbursement for Medicare Part B drugs administered in the physician office and hospital outpatient settings from 106 percent of average sales price (ASP) to 103 percent of ASP starting in 2015. If a physician’s cost for purchasing the drug exceeds ASP + 3 percent, the drug manufacturer would be required to provide a rebate such that the net cost to the provider to acquire the drug equals ASP + 3 percent minus a standard overhead fee to be determined by the HHS Secretary.
Part D drug rebates. The administration wants to let Medicare benefit from the same rebates that Medicaid receives for brand name and generic drugs provided to beneficiaries who receive the Part D Low-Income Subsidy, beginning in 2016. Drug manufacturers would have to pay the difference between rebate levels they already provide Part D plans and the Medicaid rebate levels. Manufacturers would also have to provide an additional rebate for brand name and generic drugs whose prices grow faster than inflation.
Part D doughnut hole drug discounts. Beginning in plan year 2016, the discount that manufacturers give to beneficiaries in the Part D coverage gap would rise from 50 percent to 75 percent, effectively closing the gap for brand name drugs. The phase-out for generic drugs would continue through 2020.
Pay-for-delay deals. Beginning in 2015, this proposal would prohibit agreements between branded and generic pharmaceutical companies to keep certain generics out of the market.
Generic biologics length of exclusivity. This proposal would reduce the number of years (from 12 to seven) that a manufacturer of biologic drugs has marketing exclusivity and prohibit additional years of exclusivity due to formulation changes. [/ms-protect-content]
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