Local health centers and hospitals have found advocates in Congress for their endeavor to prevent changes to a pharmacy discount program that has been instrumental in upgrading facilities and opening new ones.
Under what is known as the 340B program, health centers and hospitals that treat the poor may purchase medications at discounted prices and bill insurers at the regular price.
The hospital or health center keeps the difference in price to use for capital projects.
In the case of Hudson Headwaters, the health center chain contracts with participating pharmacies to dispense prescriptions, and then Hudson Headwater purchases medications to replenish the pharmacies’ stock.
“Since 2018, it’s estimated that Hudson Headwaters has invested $68 million from 340B savings in capital investments into the communities we serve,” said Pam Fisher, director of external affairs for Hudson Headwaters.
Glens Falls Hospital also participates in the 340B program, said hospital Spokesman Ray Agnew.
In essence, the pharmaceutical companies are chipping in a portion of the cost of caring for the poor.
Pharmaceutical companies say that use of the program has steadily grown, and the cost to the industry has exceeded what Congress originally intended.
On Sept. 11, a bipartisan group of more than 160 House members wrote to the Trump Administration to cancel a demonstration program to test the feasibility of restructuring the program to provide rebates instead of up-front payments.
“Congress intended the 340B program to enable the nation’s safety-net providers to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services,” stated the letter.
On July 31, the federal Health Resources & Services Administration announced a voluntary demonstration program to test the feasibility of restructuring the program from one that provides up-front discounts to one which provides after-the-fact rebates.
PharmaView, a pharmaceutical industry trade journal, called the announcement a “policy win” for the industry.
Some pharmaceutical companies had been attempting to restructure the program independently, but were prohibited by law from doing so without federal approval.
Fisher said that the rebate model would be detrimental to Hudson Headwaters
“In this pilot program, rebates make the program much more complex with less oversight given by HRSA, and much greater authority given to drug manufacturers,” she said. “A rebate would increase Hudson Headwaters’ upfront cost of drugs, sometimes up to 1,200%.”
The group of House members which wrote to the Trump administration agrees.
“An unchecked rebate model would severely undermine that purpose. We urge you to abandon the Rebate Model Pilot Program, or if the program must move forward, to proceed with the utmost caution and impose stronger guardrails to ensure the 340B program is not entirely dismantled,” stated the letter to U.S. Secretary of Health and Human Services Robert Kennedy Jr.
Seventeen out of 26 members of New York’s delegation, including two Republicans, signed the letter.
In the region, Rep. Paul Tonko, D-Amsterdam, was among those who signed.
Rep. Elise Stefanik, R-Schuylerville, was not.
Stefanik’s office had not returned a request to comment for this report before deadline.
Participating health centers must meet strict guidelines for serving those with limited access to health care, must demonstrate that funds are invested in patient care, and must undergo routine audits.
In another effort, The American Hospital Association has asked the Federal Trade Commission and Department of Justice to investigate if the rebate plan illegally fixes prices, Politico reported on Sept. 9.
If approved, the rebate plans will be implemented Jan. 1, according to Bloomberg Law.
In New York, state legislation has been introduced in the Assembly and Senate to prevent pharmaceutical companies from restructuring the 340B program, adding additional requirements, or restricting the utilization of the 340B pharmacy discount program. Cosponsors of the Assembly version – A6222 – include Assemblyman Matt Simpson, R-Lake George, and Assemblywoman Carrie Woerner, D-Round Lake. The Senate version is S1913.
