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Health Centers Clash with 'Big Pharma' Over Drug Savings Program

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Tuesday, November 22, 2022   

A case involving "Big Pharma" and Community Health Centers serving low-income and uninsured patients began with opening statements this month. At issue is a government drug discount program known as 340B, which requires drugmakers to sell certain medications at lower prices to health centers and hospitals.

Three drugmakers, AstraZeneca, Sanofi, and Novo Nordisk, are suing the federal government for the right to restrict price rebates for drugs dispensed at health centers.

Vacheria Keys, director of regulatory affairs for the National Association of Community Health Centers, said it cuts into the centers' revenue and ultimately, affects public health.

"As health centers have been losing money, and that translates into losing services for patients, pharmaceutical manufacturers have actually made money over the last few years," Keys pointed out. "While safety-net providers, like health centers, are passing out their COVID-19 vaccines to the most underserved communities."

The three drug companies did not immediately reply to requests for comment. Theirs is one of three similar lawsuits. The trade group Pharmaceutical Research and Manufacturers of America has argued the 340B program provides tens of billions of dollars in drug discounts, but does not require health centers or hospitals to prove the money goes to patient care. Health centers countered sharing their financial data would allow drugmakers and health insurers to force them into unfavorable contracts.

Dr. Judd Semingson, CEO of the Community Clinic in Northwest Arkansas, said they serve a large and culturally diverse group of patients, including people from the Marshall Islands who have relocated to the state. He noted until recently, many in the Marshallese community were not eligible for Medicaid, and the 340B program allows his clinic to discount some prescriptions for them, and others in need.

"This is important because this allows many of our patients to get new medications, to get top-of-the-line treatments, when it comes to things like diabetes or lung disease that may otherwise be cost-prohibitive," Semingson explained.

Health centers reported using the 340B savings to pay for services like dental care, behavioral health, helping patients with copays and in some cases, services like transportation or food. The government recently rejected an administrative complaint by Community Health Centers, so advocates for the centers are asking Congress to step in.

Disclosure: The National Association of Community Health Centers contributes to our fund for reporting on Budget Policy and Priorities, and Health Issues. If you would like to help support news in the public interest, click here.


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