AHA submits comments on draft drug shortage legislation to Senate Finance Committee; proposes support for Medicare incentive payments and increased drug supply chain transparency.

The AHA June 7 submitted comments on a discussion draft of the Drug Shortage Prevention and Mitigation Act, bipartisan legislation proposing to provide Medicare incentive payments to hospitals. This program would support long-term contracting, financing for private sector buffer stock and transparency provisions that would provide hospitals and other providers with increased insight into drug manufacturers’ supply chains and quality management practices. In the letter submitted to leaders of the Senate Finance Committee, the AHA expressed appreciation for several provisions in the bill, including efforts to incentivize greater manufacturing reliability and quality for generic sterile injectable drugs. The AHA also supported the voluntary nature of the program.

The AHA expressed concerns about impacts the bill would have on the 340B drug pricing program, such as the inability for a 340B payment-eligible provider participating in the Medicare Drug Shortage Prevention and Mitigation Program to access 340B pricing for units of a generic drug included in the program. Also, the bill would allow the secretary to reduce or waive the inflationary rebate for applicable drugs in shortage under the Medicaid Drug Rebate Program. AHA noted that this would likely result in increased drug prices and impact the determination of the 340B ceiling price, which would impact all 340B providers.