Family medicine doctor Arielle Hirschfeld recently saw a patient come in for a refill of a blood pressure drug. Her blood pressure was concerningly high, and she hadn’t taken medication for it in three months.
During the pandemic, Hirschfield said, the woman and her husband lost their custodial jobs, and she was afraid she wouldn’t be able to afford the medicine. But Hirschfeld told her she could get it through a federal discount prescription program, called 340B
“She looked visibly relieved,” Hirschfeld said.
The woman’s plight is one Hirschfeld often hears about working at a Chicago-area clinic that serves low-income people.
Many of her patients rely on the 340B program, which provides drug discounts to safety-net clinics and hospitals, like Hirschfeld’s employer, Erie Family Health Centers, so they can offer affordable medication to their patients. The clinics purchase the discounted drugs and distribute them through pharmacies like Walgreens, so patients can get refills near home.
But the 340B program is in danger after Indianapolis-based pharmaceutical giant Eli Lilly announced in 2020 that it would not provide drugs to clinics unless they administer them on-site or through a single contract pharmacy — a hurdle that makes it more difficult for patients to receive the discounted Eli Lilly drugs, according to doctors, pharmacists and clinic administrators.
Other manufacturers, including AstraZeneca, Novartis, Sanofi-Aventis, Novo Nordisk and United Therapeutics, have since followed, according to a recent federal lawsuit, and doctors now worry about a further cascading effect.
So Illinois doctors, state officials and other health care providers are sounding the alarm, warning that their ability to provide lifesaving medication to their low-income patients will be in jeopardy — a prospect even more distressing during a pandemic.
Illinois Attorney General Kwame Raoul in December blasted the move by Eli Lilly and other companies. With more than two dozen other attorneys general, he signed a letter to Health and Human Services Secretary Alex Azar urging action.
“Access to affordable medications is critical, and I urge the Department of Health and Human Services to use the power afforded to the department to enforce and regulate the (program),” Raoul said in a statement.
Eli Lilly and other drug companies, though, contend the federal program is no longer working, arguing the discount is going not to patients but to the hospitals, clinics and pharmacies, which the industry claims mark up the drugs.
“Our view is simply that the 340B program is broken. Congress had great intentions,” said Derek Asay, Eli Lilly’s senior adviser for government affairs. “But it’s quite frankly a profit engine for hospitals rather than passing along” the discount to patients.
The industry also says the program has become too big and sprawling.
AstraZeneca told the Tribune it changed its approach because of “compliance issues” with pharmacies contracted to distribute the discounted drugs. It said its drugs will still be available at a single pharmacy, and that the move “fully complies” with program requirements. Similarly, in a statement, Novo Nordisk cited “abuses arising from the excessive expansion of contract pharmacies in the 340B Program.”
But hospitals and clinics have disputed that the drugs are marked up, and say that dispensing prescriptions from one location is unduly burdensome on their patients, who come from all over the city. They believe pharmaceutical companies are putting up barriers to avoid participating in the program and therefore increase their profits.
Further, the health care providers say that while they do receive funding when insured patients use the program, those dollars are not profits but are used for crucial health programs for the low-income communities they serve. That was part of the intent of the federal program, providers say.
Meanwhile, doctors are trying to reassure their patients, while switching them to cheaper and more accessible drugs where possible.
“This is vital to my ability to care for patients,” Hirschfeld said. “The concept of it not being there is terrifying.”
The 340B program, which was created in 1992 and has enjoyed bipartisan support, requires drug makers that participate in Medicare and Medicaid programs to sell drugs to qualifying health care providers at a discount in order to “stretch scarce federal resources as far as possible,” according to the Health Resources and Services Administration, which oversees the program.
The law says that if drug companies want to sell to Medicare and Medicaid recipients, they must participate in this program.
Along with patient discounts, 340B also provides a funding source for qualifying clinics and hospitals. If a patient is insured and the reimbursement for drugs is greater than the discounted rate, the under-resourced clinics and hospitals can use the difference to fund expanded care. At Erie, those savings are used to help people with opioid use disorder, among other initiatives that would not be funded without the 340B program.
In Illinois, there are 109 hospitals that can use the program, including 20 in Chicago, according to 340B Health, a nonprofit organization of participating hospitals.
At Erie, which serves 82,000 patients at 13 Chicago-area sites, more than 21,000 people were able to take advantage of the program over the past year, said David Bruce, chief financial officer.
Erie purchases the medications at a discount and contracts with pharmacies across the city so that patients can fill prescriptions wherever it’s most convenient. But the drug companies have said they will not provide drugs unless the clinics fill prescriptions on site. Clinics that do not have an on-site pharmacy can seek an exemption.
Asay said Eli Lilly’s drugs are marked up after the company sells them at a discount, but 340B-covered hospitals and clinics dispute this, saying that a small dispensing fee is the only addition to the price.
Asay also pointed to what he called the company’s insulin exception, which says Eli Lilly will sell insulin to 340B patients through any pharmacy if the dispensing fee is not added, if health care providers send claims data to manufacturers and if the providers don’t bill the patients’ insurance companies.
But these are burdens that cut into savings and make the program less effective for patients and health care centers, said Erie spokeswoman Kate Birdwell.
With many low-income patients facing public transportation barriers, Bruce said it is not practical for most to come to the clinic site just to refill medications.
“Many people are working two jobs, with long hours,” said Hannah Rowell, Erie’s 340B program manager. “We need to be able to provide them with pharmacy access where they live.”
Since Eli Lilly’s decision, other companies have followed, issuing the same restrictions that act as barriers to clinics and hospitals participating in the program, doctors and administrators have said.
“I think they are trying to feel like they are following the letter of the law,” said Lynn Hopkins, chief executive officer of PrimeCare Health Community Health Centers, a network that serves patients at multiple sites on the Northwest Side.
But Hopkins was stunned at the abrupt nature of the pharmaceutical companies’ decision in the middle of a pandemic.
Asay said Eli Lilly had been studying the issue for some time to try to determine whether the discount was reaching patients. He said there was likely not “going to be a great time to do this” from the perspective of the hospitals and clinics.
Health care providers, though, believe the move is illegal and are fighting it.
“There is nothing in the statute that says they don’t have to give a discount if they don’t like how the covered entity” distributes the medication, said Maureen Testoni, president of the 340B organization and a national expert on the program. “It’s really hurting people.”
A group of hospitals in Testoni’s organization in Washington, D.C., Maryland, South Dakota and Virginia filed a lawsuit on Dec. 11 against Azar and the Department of Health and Human Services, arguing that the agency has “refused to take action” against the drug companies.
In September, Azar wrote a letter to Eli Lilly that said the agency has “significant initial concerns” but continues to review the policy and has not made a final determination on whether to issue sanctions.
On Dec. 30, the agency released an advisory opinion that said that qualifying hospitals and clinics are entitled to purchase the discounted drugs even if they use contract pharmacies to distribute the medication. The opinion does not have the force of law.
In December, the agency laid out an arbitration process by which health care providers and the manufacturers can settle disputes. The new rule takes effect in January, but it will take more time to actually come to a resolution, Testoni said.
In their letter to Azar, Raoul and the other attorneys general wrote: “Each day that drug manufacturers violate their statutory obligations, vulnerable patients and their health care centers are deprived of the essential health care resources that Congress intended to provide.”
‘A lot of them feel hopeless’
Meanwhile, doctors are scrambling to adjust the drug regimen of some patients so they can be treated with medication still included in 340B. But that can come with risks.
“We have been needing to contact patients, … tell them what they’ve been on is no longer available and make them switch to another medication,” said Peter Mayock, another doctor at Erie.
Though Erie has tried proactively to reach out to patients with refills coming up, some have gone to the pharmacy, learned the cost of their medications has gone up and declined to purchase them, Mayock said.
Then, their condition is out of control by the time they do seek medical treatment, he said.
Switching medications can also lead to side effects and other difficulties.
“I think it’s really a failure of corporate responsibility to do this,” Mayock said.
A lot of Erie’s patients work in the service industry, and day after day, Hirschfeld hears from patients who have lost jobs. Many have since also lost their insurance, and because they don’t know about the 340B program, they just assume they can no longer afford their medication.
“It’s really clear a lot of them feel hopeless about their situation financially,” she said.
J. Cody Sandusky, a pharmacist in southern Illinois and president of the Illinois Pharmacists Association, said many rural areas in the state also rely on the program.
“Of all the times to take these actions, that really blows my mind,” he said. “Our health system is already stretched to its limits right now.”
Madeline Buckley is a reporter for the Chicago Tribune. She has previously reported on criminal justice issues in Indiana and Texas and is a graduate of the University of Notre Dame.
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January 4, 2021 at 12:02PM