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Health Centers Call for Action to Protect Low-Cost Drug Program

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Thursday, July 7, 2022   

Advocates for community health centers and their patients are speaking out against drug manufacturers that are trying to limit a federal low-cost drug program.

The 340B program requires manufacturers to offer discounted drugs to pharmacies that contract with federally qualified health centers.

But Liz Oseguera, assistant director of policy for the California Primary Care Association, said drug companies are limiting sales to one contracted pharmacy per health center.

This forces patients who can't travel to that single location to pay more at the neighborhood pharmacy.

"Because of the limitations by manufacturers, patients are having to pay a lot more for those drugs," said Oseguera. "It could be hundreds more, depending on the drug, and that could be happening monthly."

Drug companies Merck, Sanofi and Eli Lilly did not immediately provide comment. But manufacturers have argued in the past that the program rules only require sales to one contract pharmacy per health center.

They're demanding more transparency in the form of claims records from the health centers, which Oseguera called "a nonstarter."

Two weeks ago, lack of progress in this dispute led supporters to pull a California bill that would have required greater access to contract pharmacies.

Under the 340B program, centers that operate their own pharmacy are required to reinvest any profit from the insurance payments into patient care.

Oseguera said the loss of 340B revenue means some health centers may have to cut back on services.

"With this funding, we're able to pay for things that usually are not paid in Medi-Cal," said Oseguera. "All with the help of these 340B savings that we're not able to acquire otherwise."

The federal Health Resources and Services Administration has sent letters to six drug companies, warning that the actions they're taking against contract pharmacies are illegal and threatening fines.

Several companies have filed suit over this issue.

The U.S. House passed a bill to strengthen the 340B program. A similar but more comprehensive version is expected soon in the Senate.




Disclosure: National Association of Community Health Centers contributes to our fund for reporting on Budget Policy & Priorities, Health Issues. If you would like to help support news in the public interest, click here.


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