Community Health Clinics Act to Preserve Drug Discounts

Drug companies try to restrict vital discount program

At GraceMed, we know the cost of prescriptions can often be overwhelming. As one of the two largest Federally Qualified Health Centers (FQHC) in Kansas, we provide care for more than 53,000 patients each year. Most of these patients are underserved because they are uninsured or from low-income households. As the cost of medications continues to rise, these patients often find themselves unable to afford to their prescriptions.

A discount drug program referred to as 340B was enacted by Congress in 1992 under the Public Health Service Act to provide substantial discounts to community health centers and other “covered entities.” The discounts would enable the health centers to fill prescriptions for their patients at greatly reduced prices. Without this program, thousands of GraceMed patients would not be able to afford to fill the prescriptions written for them. Many of our patients suffer from chronic conditions like diabetes. Their ability to comply with prescribed drug therapies is critical to sustain their lives.

Venus Lee, CEO

“The outcomes we can achieve with the thousands of uninsured patients we see depend heavily on their compliance with prescriptions we write,” said GraceMed CEO Venus Lee. “The rapidly rising cost of medications would make it impossible for our patients to afford to fill their prescriptions if we were not able to provide them at significant discounts.”

Another critical feature of the program is the participation of pharmacies who contract with GraceMed and other health centers to fill their patients prescriptions. This is important to because it’s not feasible for GraceMed to operate pharmacies in all the neighborhoods we serve. A dispersed network of contracting pharmacies makes filling prescriptions easier for our patients wherever they live in the community, an especially important consideration given that transportation can be a challenge for many of our patients.

Another benefit of the 340B Drug Pricing Program is that the up-front discounts allow GraceMed to stretch our funds to serve more patients. It is a requirement of the program that all of the savings generated with the discounts be put back into patient care, and at GraceMed, that’s exactly what happens. The savings enable us to cover the cost of care for those who can’t afford it.

The structure and application of the 340B Drug Pricing Program enjoys the full, bi-partisan backing of Washington to this day. The health centers implementing the program are held to the highest standards and must prove themselves to be excellent stewards of tax dollars and savings. Like GraceMed, all FQHCs that participate in the 340B program are accountable by law and are audited to ensure compliance. We implement this program with the highest integrity to ensure our patients can continue to benefit.

Currently, however, at least four drug companies, Eli Lilly, Sanofi, AstraZeneca, and Merck, are trying to change the terms of the 340B program. They are imposing arbitrary reporting requirements, refusing to ship to contract pharmacies and sometimes even refusing to honor 340B pricing altogether, preferring a rebate system instead. These actions are unconscionable, especially in light of the harm they will do to the underserved patients who need the discounts the most.

The addition of reporting requirements the drug companies are enacting is a burdensome redundancy because extensive Federal oversight and detailed reporting requirements are already enforced by the 340B program. It also takes more staff to complete these additional reports which takes away from patient care. Refusing to work with contract pharmacies significantly reduces our patients’ access to pharmaceuticals and other services. Shifting the program from up-front discounts to reimbursement will negatively impact cash flow. Our Medicare and private insurance patients would also lose the savings they now have through the 340B program.

Atif Henen, RPh

“We are living in a time when we have made enormous strides in what we can treat with medicine,” said Atif Henen, pharmacist at GraceMed’s Helen Galloway Clinic. “If these medications are priced beyond the reach of the patients who need them, however, it does no good; we end up unable to help them recover their health.”

Health centers are already feeling the effects of the push by drug companies to alter the program. Patients have had to change medications if their usual one is not available under 340B. Their local contracted pharmacy may, without warning, be unable to get the medication at a discounted rate. And FQHCs are starting to absorb the financial impact that inevitably follows the loss of the 340B discount.

We know that it is in the best interest of our patients that the 340B Drug Pricing Program continue to be implemented within the parameters of its founding legislation. Legislative health policy staff and key supporters from Kansas are working with the National Association of Community Health Centers (NACHC) to find solutions. Letters have been written to the U.S. Department of Health and Human Services (HHS) Secretary Alex Azar by Representative Sharice Davids and Senator Jerry Moran expressing concern that patients continue to receive the 340B drug discounts. The NACHC intends to pursue a lawsuit against HHS demanding that the current rules be enforced and that drug manufacturers comply with 340B regulations.

Of course, there’s nothing like the expressed will of the people to get the ball rolling. Whether you benefit directly from 340B discounts or you see the need for this program to save lives and restore health, please let your voice be heard by contacting your representative in Washington. Lifesaving medications should be available to everyone, and if we can save the 340B discounts, we can make sure they are.