One of my resolutions for this year is to get outside for a good walk every day. Get some air, get some steps, listen to a podcast. A break from work. Unless the podcast on money in university sports gets the thoughts spiraling to work parallels.
Yesterday I was listening to the New York Time’s Daily podcast on money in university football. It was a fascinating look at the evolution of (legal) money in university sports and how loopholes are exploited in a non-profit world. Donors can form coalitions and legally pay players all while getting a tax exemption. When I was in college, this happened of course, but it was more on the sly. That star player who showed up in a Mercedes and parked it illegally next to the dorm? He *worked* at the dealership for a few hours over the summer. I interned for the Smithsonian and got a t-shirt (or did I pay for that?)
The parallels on loopholes in university sports and the 340B program distracted me from a lot of the podcast. In the 340B program, pharmaceutical companies that want to be part of the Medicaid program enter into agreements in which they agree to sell outpatient drugs at a discount to specified providers (“covered entities”) that serve vulnerable patient populations.
The idea was to stretch federal resources and allow covered entities to reach eligible patients and provide more services. Covered entities are entitled to receive discounts on all eligible covered outpatient drugs and may provide those drugs to all eligible patients, regardless of a patient’s insurance status. After purchasing drugs at deep discounts from manufacturers, 340B-covered entities can bill the full, non-discounted price of the drugs to patient’s insurance companies.
The program has increased tremendously over the years. In 2022, covered entities made over $53 billion (the latest numbers released) in 340B purchases representing over $100 billion of drugs at list price.
With both college sports and 340B, there is a lot of money floating around and a legal way to stretch the bounds of the current structure to profit – whether that be a national championship or contract pharmacy relationships. If there is a way to bend it, humans seem to find it.
It made me think of an effort by the National Pharmaceutical Council and Health Affairs back in 2018 to take a look at health spending more holistically. There was a day-long event at the National Press Club that asked the question – are we ready to have a real conversation about spending and what to do. Sitting in the audience, it felt so optimistic at the time. And it was. Maybe it is the new year and the fresh start of it all, but I wonder if post-COVID, post passage of the Inflation Reduction Act, on the verge of who knows what with the election and 340B court cases, are we ready for the conversation? Are almost to the point where we can blow up what we have and do things differently? Probably not. But gosh it is a nice thought.