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Protecting 340B is Essential for Your Health

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Tucker Slingerland, MD
Chief Executive Officer, Hudson Headwaters Health Network

Sylvia Getman
President & Chief Executive Officer, Adirondack Health

Michelle LeBeau, RN – MHRN
President, The University of Vermont Health Network – Alice Hyde Medical Center
President & Chief Operating Officer, The University of Vermont Health Network – Champlain Valley Physicians Hospital

John Remillard
President, The University of Vermont Health Network – Elizabethtown Community Hospital

Dianne Shugrue
President & Chief Executive Officer, Glens Falls Hospital

The impact of COVID-19 has been devastating in the United States. Since the start of the pandemic, over 8 million Americans have been infected. Nearly a quarter of a million have died, and many more continue to suffer lingering symptoms of the illness. Millions of people have also lost their jobs, particularly those who work in the service industry. While the Adirondacks and surrounding communities have been fortunate to experience fewer cases of COVID-19 than cities like New York and Albany, the region has not been immune to the negative consequences of the pandemic.

Because health insurance is tied to employment for about half of the U.S. population, millions of people are likely to become uninsured or reliant on public programs like Medicaid. Should they or a family member get sick, the cost of care and treatment – particularly if they need expensive prescription drugs – will make their situation worse.

Worse yet, prescription costs could increase and health care services cut back in our region if the New York State government, the current administration and for-profit pharmaceutical companies get their way. This is because a little known but highly successful program called 340B is under attack.

The 340B Prescription Drug Program was created in Congress in the early 1990s to give providers access to life-saving medicines at significantly reduced prices. Only certain providers are eligible for 340B, such as those caring for large numbers of people with Medicare, Medicaid or no insurance. This includes federally qualified health centers like Hudson Headwaters and community hospitals like Adirondack Medical Center, Glens Falls Hospital and the University of Vermont Health Network – Alice Hyde Medical Center, Champlain Valley Physicians Hospital and Elizabethtown Community Hospital.

For these organizations, 340B discounts allow them to keep medications and services affordable and accessible. When 340B drugs are prescribed to patients, qualified providers can retain the difference between the discounted purchase price and the insurance reimbursement rate for qualifying patients.

For example, a community health center might be able to purchase a cholesterol-reducing drug like Crestor at $1 a dose but be reimbursed by a private health insurance company at $2 per pill. The 340B program allows the health care provider to keep that $1 difference, as long as the money is used to help low-income or uninsured patients afford treatment and to provide comprehensive health care services to underserved communities.

Our organizations use revenues from the 340B program to provide medical care and prescription drugs at little to no cost to low-income patients through sliding fees and prescription assistance programs. We also use the money to offset the cost of providing specialty services like palliative care, home-based care, obstetrics and gynecology in regions that would otherwise lack these expensive programs.

Despite its success in strengthening America’s health care safety net, the program is under serious threat. For example, the current New York State budget directs the Department of Health to remove the 340B pharmacy benefit from Medicaid managed care next year. Doing so allows the state to capture the 340B drug rebate themselves, creating a new revenue stream at a time when New York faces a multi-billion-dollar budget deficit. However, it would divert from safety-net providers the funds they use to provide services to poor and underserved patients.

Similarly, the Executive Order on Access to Affordable Life-saving Medications issued on July 24th orders federally-funded health centers like Hudson Headwaters to provide insulin and EpiPens to low-income patients at cost. However, while the order aims to lower out-of-pocket costs that patients currently pay, it is likely to have the opposite effect. Many patients will pay more for these drugs. The order will also impose additional administrative burdens on providers while preventing them from recovering the costs of distributing and dispensing these life-saving medications.

Finally, in a year that saw both tremendous job losses and record pharmaceutical profits, drug manufacturers like AstraZeneca, Eli Lilly, Novartis and Sanofi are refusing to provide federally-mandated 340B discounts to hospitals and community health centers that contract with private pharmacies. These multinational drugmakers are also imposing arbitrary reporting requirements on health centers, demanding access to confidential patient data without any legal right to see that information.

While attacks on 340B started long before COVID-19 landed on the nation’s doorstep, the pandemic offers for-profit drug makers and others convenient cover and opportunity to chip away at this crucial program. Everyone agrees that the high cost of health care needs to be addressed but dismantling the 340B program is not how to do it.

Community health centers like Hudson Headwaters and community hospitals like Adirondack Medical Center, Glens Falls Hospital, Alice Hyde Medical Center, Champlain Valley Physicians Hospital and Elizabethtown Community Hospital have helped the people of Northeastern New York for decades, providing health care services tailored to the needs of the communities that we serve. The revenues earned through the 340B Prescription Drug Program are necessary to ensure that high-quality, affordable health care remains accessible to all in the region.

State and national leaders must act now to save this vital program and the patients it supports.