BITTER MEDICINE | Columns | The Journal Gazette

The COVID-19 pandemic rages on, half a million Hoosiers are out of work, and Indianapolis-based Eli Lilly has chosen this moment in history to end the company’s participation in the 340B Drug Pricing Program that provides affordable prescription drugs to low-income residents.

What was Lilly thinking? It’s hard to tell – the company didn’t respond to multiple requests for interviews.

But the medical professionals who are trying desperately to keep the poorest people in the country healthy say the company is attempting to recoup some of its profits from independent pharmacies, which sometimes offer their own discounts. They accuse drug manufacturers threatening to exit the 340B program of courting potential disaster.

The 340B program allows health centers to buy prescription drugs at discounted prices, at a time when the country’s health care system is struggling to provide basic care for patients with chronic conditions who need vital outpatient treatment.

The threatened end of 340B most severely affects community “safety net” health centers, including Fort Wayne’s Neighborhood Health Clinics Inc., which provide primary health care to vulnerable people regardless of their ability to pay.

Many area hospitals may also lose their access to affordable drugs. Tami Brigle, public relations manager at Parkview Health, said 340B programs are in place to serve low-income patients at Parkview Regional Medical Center, Parkview Randallia, Parkview Behavioral Health Center, and at Parkview hospitals in LaGrange and Wabash.

Neighborhood Health Clinics President and CEO Angie Zaegel worries that the effective end of 340B support from Lilly and other manufacturers will make it impossible for the center to provide affordable prescription drugs to low-income northeast Indiana residents.

She said Neighborhood Health Clinics keep careful records of the drugs they prescribe, and their sources.

“We’re a much smaller fish,” Zaegel said. “We’re a qualified health center. This is the only way we’re able to provide our patients with affordable medicines to keep them healthy. We’re closely monitoring this, and trying to understand the overall impact, which we see as a threat to the 340B program. We rely on contracted pharmacy relationships. I’m not sure how we’ll help our patients get access to affordable drugs.”

“Angie is not alone,” said Drew Thomas, finance and operations manager for the Indiana Primary Health Care Association. “We represent 36 primary health centers in Indiana that treat 600,000 Hoosiers, and a vast majority of these clinics have 340B programs.”

Created by Congress in 1992, and representing less than 3% of total U.S. drug sales, the 340B program allows basic health care centers to stretch the federal funding they receive, and provide care to more people.

Hospitals and health clinics such as Neighborhood Health Clinics use their savings to fund specialty clinics that treat patients with specific conditions like diabetes.

The 340B program has also been an important tool for stretching federal grants to help combat the opioid epidemic, which has ravaged urban and rural communities alike.

Pharmacies first

Lilly’s move is not the first time the hammer has dropped on 340B.

In 2018, the Center for Medicare and Medicaid Services reduced Medicare drug reimbursements for 340B hospitals by 30%, which meant participating hospitals received less in reimbursements and consequently have less money to provide other necessary patient services.

As part of the latest action, Lilly was joined by four other pharmaceutical giants – Merck, Sanofi, Novartis and AstraZeneca – in announcing dramatic changes to their program participation. AstraZeneca said it would no longer distribute drugs to what are described as “contract pharmacies” if hospitals have their own in-house pharmacies.

The other three companies have said they want more detailed reporting from hospitals and clinics on 340B drugs distributed through contract pharmacies. Contract pharmacies – including Walgreens and CVS –are independent companies that often provide additional discounts to 340B clinics and hospitals for the same drugs, a practice which angers manufacturers.

They say duplicate discounts deprive them of legitimate profits.

Jing Xu, a community health research analyst at the IU School of Informatics and Computing – Indianapolis, believes manufacturers are threatening to cut off supplies to health centers so they can bypass some of the regulatory restrictions established by the U.S. Health Resources and Services Administration, which administers the 340B program.

“This could be detrimental to our patients,” Xu said. “Health centers are required by HRSA to ensure that benefits go to patients. All things considered, this is particularly impactful for health centers. They serve the majority of low-income populations and underserved groups.”

Zaegel said she was recently notified that all 340B drugs distributed by Lilly would be dispensed from a single pharmacy in Fort Wayne, a huge decrease from the dozen pharmacies that currently serve Neighborhood Health Clinics patients.

She said such a change could also be disastrous for patients who already struggle with transportation and other challenges.

A reprieve?

The 340B member clinics and hospitals got a reprieve of sorts in the form of a Sept. 21 letter to Lilly from the federal health resources administration, which admonished the company for imposing “unilateral” decisions on local clinics, hospitals and pharmacies in the midst of the pandemic and accompanying high unemployment, without consulting with clinics or hospitals.

“The (HRSA is) saying to them that they’re kind of overstepping their bounds,” said the Primary Health Care Association’s Thomas. “They’re an arbiter, and they’re trying to stay neutral. There is an underlying concern that duplicating discounts exist. However, health centers receive regular self-audits on either a monthly or quarterly basis and an external audit from the (Office of Pharmacy Affairs) to ensure the requirement that their inventory is properly managed.”

Though it’s unclear what authority the Health Resources and Services Administration has to regulate participation in the 340B program, Zaegel said pressure from the agency might persuade the five manufacturers to apply the brakes, at least temporarily.

“This situation is incredibly fluid,” Zaegel said. “What we’ve talked about today could be different by the end of next week. I’m cautiously optimistic that there will be a pause, so we can digest what’s happening and provide a thoughtful response, instead of just having our (medication) access cut off.”

Julie Creek is a Fort Wayne journalist. She wrote this for The Journal Gazette.