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HRSA Reorganization Could Affect 340B Program

Donna Young

The Office of Pharmacy Affairs (OPA), which was responsible for administering the 340B drug-pricing program, was eliminated in February and replaced with the Pharmacy Services and Assistance Branch as part of the Bush administration’s reorganization of the Health Resources and Services Administration (HRSA).

The pharmacy branch is part of a newly created division in HRSA’s Bureau of Primary Health Care (BPHC) called the Division of Health Center Development (DHCD).

Changes in HRSA’s structure are part of a larger reorganization that is ongoing in the Department of Health and Human Services (HHS), said William von Oehsen, general counsel for the Public Hospital Pharmacy Coalition, an organization of hospitals that participate in the 340B program.

In 1992 Congress created the 340B program, which provides certain hospitals and federally funded grantees access to low prices on pharmaceutical products.

DHCD was established to help further the Bush administration’s initiative to expand the number of community health centers, von Oehsen said.

According to a February 21 Federal Register notice, DHCD serves as the organizational focus of the competitive grant process for BPHC and has the responsibility to manage and expand the number and types of organizations that participate in the 340B drug-pricing program.

Gary Stein, director of federal regulatory affairs for the American Society of Health-System Pharmacists (ASHP), said the Pharmacy Services and Assistance Branch has about half the number of staff members as did OPA before the reorganization in February.

Jimmy Mitchell, former OPA director, is now acting branch chief, according to von Oehsen.

Kay Garvey, HRSA communications director, declined to provide details about the reorganization. She refused several requests by AJHP to interview Mitchell.

The Bush administration is reportedly making access to government officials and public information more difficult.

Dennis Williams, HRSA deputy administrator, and Sam Shekar, BPHC associate administrator, assured members of the 340B Coalition, an organization that represents thousands of 340B program participants, at a January 17 meeting that HRSA’s restructuring would not affect the administration of the drug-pricing program, von Oehsen said.

“They assured us that the reorganization was not going to have any effect on the administration of the 340B program, that the mission would be preserved and continued, and that the operation of the program wouldn’t change,” he said. “We have to take at face value what we have been told.”

Von Oehsen said his organization would be watching closely to make sure there are not adverse effects on the 340B program or its participants.

“But I don’t think we can assume that reorganization itself is a negative thing,” he added. “It could be a positive thing. It’s possible that program operations will be better integrated with other HRSA initiatives. There may be more flexibility in administering the program.”

The decision-making authority in the Bush administration is much more centralized than in previous administrations, von Oehsen noted.

If HHS Secretary Tommy G. Thompson and other Bush administration officials are sympathetic to 340B program participants’ views, von Oehsen said, a lot of bureaucratic red tape can be avoided and government can more quickly respond to requests.

The downside of a centralized government, he noted, is that only a few people can make decisions. Certain requests might not be a priority for top officials; therefore, those requests could actually take longer to be addressed.

With the reorganization and downsizing of the new pharmacy branch, von Oehsen said, “people who were quite capable of administering programs have now been stripped of their authority.”

Some of OPA’s tasks, such as technical assistance and pharmacy advice, have now been shifted to the Pharmacy Services Support Center (PSSC), a contract program led by the American Pharmacists Association (APhA).

HHS’s Thompson announced the $993,392 contract in October 2002.

Several pharmacy organizations, including ASHP, are assisting in development and administration of the PSSC program.

APhA’s Diane Goyette oversees the PSSC program and said the center’s role and mission have been “largely unaffected by the reorganization.”

“There has been some uncertainty about proceeding with certain projects, but that was temporary and things are back on track,” she said.

Since the reorganization, she added, PSSC has become more critical to facilitating the provision of comprehensive pharmacy services in HRSA-supported health care sites.

In light of the staffing reductions in the Pharmacy Services and Assistance Branch, Goyette said, PSSC’s role is even more important.

Von Oehsen said that the Bush administration’s “general philosophy is to the extent that they can outsource to the private sector, they would rather do that than hire more government staff.”

The changes made in HRSA’s structure concerning pharmacy services underscore the importance for PSSC in meeting the needs of 340B program participants, said Brian M. Meyer, director of ASHP’s Government Affairs Division.

ASHP will be paying close attention to the level of service provided to disproportionate-share hospitals and other entities participating or planning to participate in the 340B program, he added.

ASHP’s Leadership Agenda, Meyer noted, contains a plank to help pharmacists deal with the affordability and accessibility of pharmaceuticals.

Some members of Congress are also paying attention.

When Congress passed appropriations for fiscal year 2003, the House and Senate Appropriations Conference report noted that “planned efforts to restructure HRSA programs and grants management functions could have a negative effect on many HRSA grantees. The centralization of grant decision-making, coupled with the changing roles of staff in HRSA’s field offices, could significantly diminish the institutional knowledge and expertise in community-based health care that is crucial to leading HRSA forward during this important period.”

Congress scolded HHS officials for failing to consult with Appropriations Committee members before reorganizing HRSA departmental offices, programs, and activities.

Conference members recommended that “these changes not be undertaken until they can work with all stakeholders, including Congress, to show that they will not reduce the level and scope of assistance provided to grantees.”