By Christina Lavoie, Director of Policy, Health Industry Distributors Association
In an era of divided government and Congressional gridlock, more and more of healthcare policy is set via regulations from federal agencies. HIDA monitors regulations that apply to our industry, and frequently comments on proposed regulations that might adversely affect the medical supply chain.
Among recent regulatory developments are the following:
DSCSA Implementation: Since Congressional passage in 2013, implementation of the Drug Supply Chain Security Act (DSCSA) has been an ongoing process. Because the healthcare supply chain is highly connected, cooperation between public and private stakeholders has been essential. HIDA recently shared with federal partners the results of a member survey on the progress of DSCSA implementation.
- Approximately 70% of healthcare distributors surveyed said that they have received electronic serialized data from manufacturing partners, but that data is not always timely, accurate, and/or complete.
- When HIDA asked respondents if they would be fully ready to implement DSCSA requirements when the stabilization period ends on November 27, 2024 – 25% said they would be ready.
These results show the industry’s commitment to DSCSA implementation as well as the varying degrees of readiness depending on size of company and trading partner readiness. HIDA has requested that distributors be given an additional six to eight months for DSCSA implementation.
Drug Shortages: In the FY 2025 final payment rule for inpatient hospitals, the Centers for Medicare & Medicaid Services (CMS) established a separate payment for establishing and maintaining access to essential medicines. To help mitigate future drug shortages, CMS finalized its proposal to establish a separate payment to support small, independent hospitals in establishing and maintaining a buffer stock of essential medicines. CMS focused on these hospitals as the agency believes they are vulnerable to supply disruptions because they lack the resources of larger hospitals that are part of a chain organization.
Nursing Homes: Payments to Skilled Nursing Facilities (SNFs) will increase by 4.2% or $1.4 billion in Fiscal Year 2025. The 4.2% increase is calculated based on the SNF market basket percentage increase of 3.0%, plus a 1.7 percentage point forecast error adjustment, minus a 0.5 percentage point productivity adjustment.
Tariffs On Medical Products: The Office of the U.S. Trade Representative (USTR) announced that Section 301 tariffs on a variety of medical products would take effect on September 27, 2024. These tariffs would be phased in over two years on medical products such as facemasks, gloves, and syringes. Tariffs on facemasks would increase by 50% by 2026 and medical glove tariffs would increase by 100%. For medical syringes and needles, tariffs would immediately increase by 100% but the USTR excluded enteral syringes from this increase until January 1, 2026.
As a voice for the medical supply chain, HIDA advocates for the healthcare distribution industry with regulatory agencies in the federal government. Federal regulations impact our industry across the continuum of care – tariffs levied at the port, drugs traced across the country, and nurse staffing at the bedside. By working collaboratively with both public and private sectors, HIDA continues to shape policies that enhance the accessibility and quality of healthcare products for all stakeholders.