CMS Administrator Seema Verma speaks at White House podium
Health systems use 340B to expand "their profit and monopoly power," Trump administration CMS Administrator Seema Verma said in a Wall Street Journal op-ed.

Ex-CMS Leader Verma: Big Health Systems Use 340B to Expand Profit and Monopoly Power

Seema Verma, ex-President Trump’s Centers for Medicare & Medicaid Services administrator, said in a Wall Street Journal op-ed yesterday that large health systems work to expand their use of the 340B program “and thus their profit and monopoly power.”

“Across the country healthcare monopolies—including large hospital systems—are refusing to be held accountable for quality, to accept value-based contracts, and to negotiate prices with payers, employers and state Medicaid agencies,” Verma wrote in a commentary published online Sunday and in print yesterday.

“Additionally, the federal 340B Drug Pricing Program provides discounted drugs to so-called safety-net providers to help them reduce medication costs for low-income patients,” Verma continued. “But providers aren’t required to pass on the discounts when selling medicines to patients and can pocket the profit. To this end, 340B providers have worked to acquire physician-owned clinics and smaller hospitals, allowing them to expand their use of the program and thus their profit and monopoly power.”

Verma’s sentence about providers not passing on 340B discounts links to the newspaper’s Dec. 20 investigative article that raised questions about how some hospitals qualify for and use 340B the program. The bulk of her op-ed is about moving Medicare and Medicaid toward value-based reimbursement.

In a January 2021 interview with Modern Healthcare as she prepared to leave CMS, Verma described the nearly 30% cut in hospitals’ Medicare Part B reimbursement for 340B drugs as one of her most important achievements. “It was about addressing monopolies,” she said. The U.S. Supreme Court ruled last year that the cuts were illegal.

According to Verma’s LinkedIn page, she currently is a senior advisor to two private equity firms and is a board director for health care companies Lumeris, Monogram, Wellsky, and Lifestance. Verma says she provides advisory services to a variety of early stage and large public companies including national payers and technology companies focusing on strategy, value creation, and operations.