Medicare's Efforts to Alleviate Drug Shortages Could Cause More Harm Than Good, Experts Warn

In a recent proposal, the Centers for Medicare and Medicaid Services (CMS) outlined a plan to address the ongoing issue of drug shortages in the healthcare system. However, experts and hospital groups are warning that this plan could have major gaps and even exacerbate the problem.

The proposal, which could be finalized within the month, would reimburse hospitals for the costs of maintaining a three-month stockpile of critical medicines. This policy is part of President Biden's efforts to strengthen the public health supply chain in the wake of the pandemic.

While the intent of the policy may be well-meaning, experts are raising concerns about its potential impact. Marta Wosińska of the Brookings Institution and Emily Tucker of Clemson University noted in a letter to CMS that the proposal would only cover a portion of the costs for most hospitals and would not include compensation for the actual purchase of the drugs. This could make it difficult for smaller and rural hospitals to take advantage of the policy, ultimately disadvantaging vulnerable populations.

In addition, the policy could create further supply issues as hospitals rush to stockpile drugs, overwhelming wholesalers and manufacturers who may not be able to keep up with the sudden increase in demand.

Even industry groups, such as the American Hospital Association and America's Essential Hospitals, have expressed concerns about the proposal. They warn of the administrative burdens it could create and the potential lack of storage space in many hospitals.

To truly address the issue of drug shortages, experts suggest that CMS should consider fully funding storage investments and upfront drug purchasing costs. They also recommend funding for a longer six-month supply, as well as staggering implementation to avoid overwhelming the supply chain.

Furthermore, it is important to note that even the Congressional Medicare advisers have expressed doubts about the effectiveness of Medicare payment policies in addressing drug shortages. They suggest that direct purchases by the federal government may be a better solution.

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Ultimately, the issue of drug shortages is a complex one and will require a comprehensive approach from multiple stakeholders. While there is bipartisan interest in Congress to tackle the issue, there is disagreement on how best to do so.

Another words, the American people should expect no solutions anytime soon.