WASHINGTON — Medicare has a new proposal to pay hospitals more to stockpile essential drugs — an idea that comes as doctors report running low on critical chemotherapies and other drugs. But experts caution the policy could cause the very shortages that government officials are trying to avoid.
For years most of the solutions for addressing drug shortages have involved giving the Food and Drug Administration more power. During the Covid-19 pandemic, Congress empowered the FDA to make drug companies create backup plans for manufacturing facility interruptions, and to collect information from drug makers on where they source ingredients. The FDA also has the authority to prioritize reviews of applications for drugs in short supply and to prioritize inspections of manufacturing facilities that plan to ramp up production.
But Medicare has its own new idea: paying hospitals to create a “buffer stock” of 86 medicines that HHS deems critical. Medicare would not pay hospitals for the drugs. Rather, it would pay hospitals for the cost of managing a three-month inventory of the drugs. It published the proposal in a rule last week; it’s seeking comment now before it will weigh whether to finalize the policy.