In 1992, the federal government enacted the 340B Drug Discount Program. It afforded community health centers (CHCs) the ability to provide pharmacy services to their patients, a service that many CHCs did not have the resources to provide otherwise.
The program protects safety-net providers, including CHCs, from escalating drug prices, allowing us to purchase drugs at a discounted rate from manufacturers and pass those discounts directly to the patient. This program is presently under threat.
That is why I support Dr. Richard Pan’s Senate Bill (SB) 939. This bill, currently being reviewed by the Senate Committee on Health, would prohibit discriminatory actions by drug manufacturers and administrators when providing 340B drugs to health centers and the patients they serve.
It provides important consumer protections that are necessary to protect 340B savings and ensure that the savings remain with health centers and their communities, creating greater access to health care and equity for all.
The 340B Program also allows safety-net providers the ability to accrue savings that must be reinvested directly into patient care and services. Thus, the program enables covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.
For 30 years CHCs have used those savings to provide free medications to patients experiencing homelessness, free transportation vouchers, free nutrition classes, and hire provider types (like community health workers) who are not billable within Medi-Cal.
Today, there are over 1,300 health centers in California that provide care to 7.2 million people – that’s one in every five Californians and one in three Medi-Cal patients.
Additionally, 68% of CHC patients are from BIPOC communities. CHCs are often the only source of primary and preventative care for California’s most diverse communities, including those experiencing homelessness, immigrants, and agricultural workers.
Anyone who walks into our health centers today can access a variety of services from primary care to dental to behavioral health care and a variety of wraparound services, regardless of whether they have health insurance, or an ability to pay for care. A large part of why we’re able to offer those services is thanks to savings we receive from the 340B program.
In recent years the 340B program has been under assault by pharmacy benefit managers (PBMs), drug manufacturers, and others within big Pharma.
Through the expansion of the Affordable Care Act & Medi-Cal, more low-income patients can access healthcare in California, meaning more are also able to access medications, causing the 340B program to expand. Given this fact, manufacturers have put practices in place that limit patient access to 340B priced drugs while PBMs focus on trying to take 340B
savings away from CHCs, and out of the local communities that need them, threatening patient access to critical medicines made available through the program.
Health centers were born out of the Civil Rights movement to ensure that all communities, particularly communities of color, would have access to high-quality care that is provided in a culturally and linguistically appropriate manner. This program has allowed covered entities, including CHCs, to contract with local pharmacies so that our patients can access low-cost medications in a convenient manner. The continual acts of greed by pharmaceutical companies and PBMs threatens equity and access that CHCs were designed to create.
Community health centers around the country are sounding the alarm over Rx drugs manufacturers' attacks on the federal 340B program. Since 2019, 21 states have passed laws addressing PBM discrimination against 340B covered entities.
It’s time for California, the policy trendsetter, to become the next state to protect the 340B program so it can operate as intended.
That is why Dr. Richard Pan’s SB 939 is so important and why I so fervently speak in favor of this legislation.
About the Author
Dr. Brooks is Chief Medical Officer and past Chief of Pediatric and Adolescent Medicine at Watts Healthcare Corporation in Los Angeles, California (CA