Health Center Advocacy, Health Center Federal Policy, Uncategorized

Setting the Record Straight on the 340B Drug Discount Program

Sue Veer, CEO, Carolina Health Centers, Inc.

My name is Sue Veer and for the past 15 years I have served as CEO for Carolina Health Centers, Inc.  (CHC). We are a federally qualified health center (FQHC) – also known as a Community Health Center – that serves as the primary care medical home for over 28,000 patients across seven rural counties in South Carolina.  We operate 12 medical practices, a seasonal farmworker health program, and two community pharmacies that also deliver prescriptions to our patients in those outlying rural areas. 

Early in my tenure I realized the essential role prescription medication plays in improving health outcomes and the cost effectiveness of care.  By providing our patients with access to needed medication we help them effectively manage acute and chronic conditions.  By keeping our patients well we reduce hospital admissions and the use of costly settings like emergency rooms and urgent care centers.

The 340B program makes drugs affordable and supports other critical health care services

The 340B Drug Pricing Program, enacted by Congress in 1992, is what enables health centers like mine to provide access to affordable prescription medication.  This law requires manufacturers to sell prescription medication for outpatient use to safety-net providers – those serving the most vulnerable populations – at a discount, enabling not just affordability, but also providing savings that support the availability of more comprehensive health care services. 

There is much that is unknown, misunderstood, and even misconstrued about health center pharmacy programs and the 340B Drug Pricing Program. 

The problems with the Trump Administration’s Insulin Executive Order

Let’s talk about the cost of insulin for example.  Ostensibly to address the high cost of these medications, the Trump Administration issued an Executive Order requiring Community Health Centers to provide insulin to our patients at no more than our 340B cost.  The Final Rule for that EO was to be effective on January 22, 2021; however, President Biden has delayed the effective date by 60 days, igniting conjecture that the Biden Administration is “raising” the price of insulin.  Let’s examine the inaccuracies in that line of reasoning:

  • As of 2018 there were 26.8 million Americans diagnosed with diabetes[1].  Only 2,709,755[2] of those are patients of the nation’s 1,400 Community Health Centers.  The Trump Administration EO applied ONLY to Community Health Centers, meaning that it would only impact those patients with diabetes receiving their care – including having their prescription for insulin filled – at a health center.  The EO did ABSOLUTELY NOTHING to reduce the cost for the vast majority of people with diabetes in this country!
  • The EO was and is a completely unnecessary measure to solve a problem that doesn’t exist for the patient it impacts.  By both mission and mandate all services available at Community Health Centers – including prescription medications – are provided regardless of insurance status or ability to pay.  Each health center is required to offer an income-based sliding fee for those patients whose incomes fall at or below 200% of the poverty level[3].  Our sliding fee discount applies not just to the uninsured, but also to insured patients with high deductibles and copays — and if the patient can’t afford even the deeply discounted cost of their insulin, they are not turned away.  The cost is covered by other resources like patient assistance programs and at my health center, a Benevolence Fund that is supported by staff contributions. 
  • The implementation of this unnecessary EO will result in an unwieldy administrative burden that adds to the operating costs of nonprofit health centers, which already operate at thin margins.  In addition, it will eliminate the health center’s ability to retain any of the savings from participation in the 340B program – even those savings necessary to cover the cost of dispensing the drugs. 

Congress envisioned the 340B program as a way to give vulnerable populations access to affordable prescription medication, but their intention was so much more far-reaching and impactful.  Their intention was to support a strong and viable health care safety net that protected the most vulnerable of Americans.  Health centers have taken that vision and made it a reality, but recent developments including the Trump Administration EO regarding insulin and injectable epinephrine threaten the viability of our pharmacy programs so essential to the comprehensive primary care medical home model.

[1] American Diabetes Association

[2] 2018 UDS National Health Center Data

[3] HRSA Health Center Program Expectations

1 Comment

  1. Thank you for a very succinct summary of the Executive Order conundrum . It is very obvious the EO is unnecessary and will do nothing to reduce the price of insulin for the vast majority of diabetics in America .

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