Cheryl Willman, MD, director and CEO of the cancer center at Albuquerque-based University of New Mexico, says proposed cuts to the Medicare 340B drug pricing program will be "devastating" to her organization, according to a report from the Albuquerque Journal.
Beginning Jan. 1, CMS will pay 340B hospitals 22.5 percent less than the average sales price for drugs purchased through the program. The current going rate for drugs purchased through the program is the average sales price plus 6 percent.
These cuts are expected to reduce revenue by $14 million across UNM's health system, with most of the loss — an estimated $9.2 million — concentrated at the cancer center, where the most expensive drugs are used, according to the Albuquerque Journal. More than $9 million in cuts equates to nearly 10 percent of the cancer center's budget, according to Dr. Willman. Cuts of this magnitude could put the cancer center's status as a National Cancer Institute comprehensive cancer center at risk, she told Albuquerque Journal.
Savings from the drug payment cuts will be redistributed for various outpatient services; however, UNM expects to only recoup about $1 million in redistributed payments, according to the report.
Read the full report here.
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