July 5, 2022
OCHIN participated in a Twitter chat about the 340B Drug Pricing Program (340B) on Tuesday, June 14. During the real-time conversation hosted by National Association of Community Health Centers (NACHC) Health Center Advocacy Network, OCHIN provided our policy perspective on 340B, including how it helps community health centers expand services and the importance of protecting the program.
340B reduces national health disparities
The 340B Program requires drug manufacturers to provide prescription medicines to eligible health care organizations at significantly reduced prices. Community health centers (CHCs) then use the savings to provide affordable discounted or free medications to uninsured and underinsured patients and expand access to services like dental, behavioral health, and specialty care to meet the unique needs of their communities.
The program not only ensures access to treatment for patients in rural and other underserved communities; it also generates funding that is essential for community-based clinics to maintain access on the front lines in the face of three public health crises: the ongoing COVID-19 pandemic, the growing mental health crisis, and the opioid epidemic. Since the program was launched, it has served as a critical way for patients in rural and underserved communities to get access to affordable medications.
The 340B Program ensures health center patients get the prescriptions and the care they need, regardless of their ability to pay.
We stand with CHC providers to support a strong circle of community care
In the past few years, despite lacking the legal authority to do so, several drug manufacturers have imposed burdensome requirements on participating 340B Program community clinics. These requirements have created costly reporting, monitoring, technical and administrative re-engineering, staff training, and workflow redesign obligations that reduce savings and redirect funds away from services and medication.
At the same time, health insurers and their agents, called pharmaceutical benefit managers (PBMs), have “pickpocketed” the savings through unfair, anticompetitive contracting practices. Both pharmaceutical companies and health insurers increased their attacks on the 340B Program during the COVID-19 public health emergency as community health clinics struggled.
Discriminatory practices and policies by pharmaceutical manufacturers and PBMs continue to burden community clinics that are already stretching insufficient resources to serve their expanding patient populations. These actions strip health centers of 340B Program benefits mandated by Congress and undermine their ability to provide affordable pharmaceuticals and other services to their patients.
Our analysis underscores the importance of 340B Program for OCHIN network members
To understand the impact of 340B Program on OCHIN network CHCs, we estimated 340B net revenue per patient per year in two ways:
- Using accounting data from 30 OCHIN members
- Using national data on 340B net proceeds to providers
We found that 340B provides essential financial sustainability for our member clinics. For example:
- When using a top-down approach based on national data from the pharmaceutical industry, we estimated 340B net revenue per patient per year to be in the range of $214 to $311.
- When using a bottom-up approach with OCHIN member data, we found:
- Across members in the study, 340B net revenue included an average of 11% of total member revenue.
- 340B revenue as a % of member total revenue estimate is 24-30%, depending on the use of contract pharmacies and the intersection of the 340B and Medicaid Drug Rebate Programs, which vary state by state.
- The 340B Program does not spread financial benefits equally among community health clinics. Variation is likely due to patient mix and utilization of high-cost pharmaceuticals.
Depriving CHCs of 340B Program benefits has increased negative impact on rural communities
In the OCHIN network, the 340B Program is used more by providers in rural communities. Given the health care crisis in these communities, attacks on the 340B Program by pharmaceutical and health insurance companies have an increased negative impact on these patients and their providers and worsen the barriers faced by them.
These attacks reduce funds to make medication more affordable, which negatively impacts patient health outcomes. They will also reduce funding to offset the higher overall costs that rural providers experience due to increased patient medical complexity. The widely documented strain rural providers face and the lack of access patients in rural communities face pre-dates the COVID-19 pandemic and has worsened conditions that will only get even worse if 340B savings are reduced.
- In the OCHIN network, patients in rural communities are older on average than patients in urban communities.
- Among OCHIN members, the percentage of patients who are 65 and older is twice as high in rural communities as in urban communities, 24% and 12% respectively.
- The near quarter of patients served in rural communities who are 65 and older are prescribed an average of five medications as compared to an average of four prescribed medications for patients between the ages of 18 and 65.
- As a result, a larger percentage of patients in rural communities face higher medication costs, and OCHIN members manage more clinical complexity for these patients.
Providers in urban communities also face similar challenges. If 340B savings is reduced, funding shortages will lead to treatment gaps. These treatment gaps will then lead to greater patient medical complexity and higher healthcare costs.
When you protect 340B, you protect low-income, underinsured patients.
View OCHIN’s full participation in NACHC’s Health Center Advocacy Network Twitter Chat about 340B on our Twitter page.
OCHIN public comments on 340B
- FTC PBM regulation to protect 340B Affordable Prescription Drug Program
- OCHIN letter to Congressional Leaders to Replenish HRSA Uninsured Funds
- HHS COVID-19 Equity Taskforce Recommendations
- HHS Proposed Hospital Outpatient Prospective Payment System and 340B Comments
- The Preserving Rules Ordered for The Entities Covered Through 340B Act(H.R. 4390)
- Request to Rescind 340B Drug Pricing “Pass-Through” Rule Destabilizing Community Clinics