Rear Adm. Krista Pedley’s promotion, and OPA’s new place within the HRSA administrator’s office, are symbolic of the 340B program’s growing importance in prescription drug pricing policy, and reflects how highly regarded Pedley is in HRSA and HHS.

Pedley’s Promotion May Presage Hiring of a New 340B Program Director

U.S. Public Health Service (PHS) Rear Adm. Krista Pedley, who has led the federal 340B drug pricing program for more than a decade, has been promoted within the U.S. Health Resources and Services Administration (HRSA) in conjunction with a major HRSA overhaul. HRSA is expected soon to invite individuals to apply to be her successor as director of HRSA’s Office of Pharmacy Affairs (OPA), the HRSA unit that runs the 340B program.

Pedley has become Director of a new Office of Special Health Initiatives (OSHI) within the Office of the HRSA Administrator—making HRSA’s leader her new direct report. The change was effective Jan. 15, the same date as the broader HRSA overhaul. OSHI includes the 340B program plus HRSA’s vaccine injury compensation, global health, oral health, and behavioral health programs. HRSA’s Office of Women’s Health and Office of Health Equity “will work closely with this new office,” Tom Engels, whose last day as HRSA administrator was yesterday (see related story), said in a Jan. 15 email to the entire agency’s staff announcing the HRSA reshuffle.

Prior to HRSA’s reorganization, OPA was housed within HRSA’s Healthcare Systems Bureau (HSB). That bureau has been abolished and its functions have been moved to other HRSA bureaus. HRSA’s new internal structure means there is now one less layer of bureaucracy between the 340B program and HRSA’s top brass.

HRSA formally published an announcement yesterday in the Federal Register describing the reorganization. It posted the announcement for public inspection late last Friday afternoon. As of this morning, HRSA’s website had not yet been updated to reflect the changes.

We asked HRSA yesterday if OPA would continue to have its own director under the reorganization. “When future personnel decisions are made, they will be reflected on the organizational chart on the HRSA website,” a HRSA spokesperson said. Individuals knowledgeable about HRSA’s internal affairs said they expect the OPA director position will soon be posted on the federal USA Jobs website.

HRSA politely declined our request for an interview with Pedley about her new responsibilities and her feelings about relinquishing hands-on control over the 340B program.

A one-star flag officer in the PHS Commissioned Corps, Pedley is HRSA’s highest-ranking PHS officer. Pedley, who is a pharmacist, transferred to HRSA in 2007 after serving in the Office of the Health and Human Services (HHS) Secretary and the Food and Drug Administration. In July 2010, she succeeded Jimmy Mitchell as OPA director, a post Mitchell had held since 1997. Between them, Pedley and Mitchell ran the 340B program for all but the first four years of 340B’s 28-year existence.

Pedley’s promotion, and OPA’s new place within the HRSA administrator’s office, are symbolic of the 340B program’s growing importance in prescription drug pricing policy. Pedley’s elevation also reflects how highly regarded she is in HRSA and HHS.

“She is an excellent leader,” then-HRSA Administrator Engels said during the March 2020 ceremony at which Pedley received her admiral’s star. “As her promotion here today makes clear to everyone, she is an outstanding Commissioned Corps Officer.”

Moving OPA into the HRSA administrator’s office could boost OPA’s funding, which now is provided for under a line item in HRSA’s annual appropriation from Congress. OPA’s funding has been stuck at just over $10 million for several years, and Congress repeatedly has rejected HRSA’s requests for a 0.1 percent user fee on 340B purchases to fund OPA, going back to the Obama administration. As a unit within the administrator’s office, OPA’s funding presumably now can come from HRSA’s approximately $155 million program management budget.

Engels developed HRSA’s new structure over several months with input from HHS under Trump administration control, and former HHS Secretary Alex Azar approved the changes. Although the preceding administration drew HRSA’s new organizational chart, the Biden administration is not expected to disturb it, sources say, at least not immediately.

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