Missouri, don’t make abuse in rural drug program even worse
Nearly 75% of adults in Missouri live with at least one chronic condition, which can often have a significant impact on their lives. As a rheumatologist in Kansas City, I’ve seen firsthand the toll that chronic conditions such as arthritis can have on my patients. It can be even more difficult for those who are living below the poverty line or those who don’t have insurance and rely on government safety nets to access their medication. That’s why it’s infuriating to see Missouri legislators consider policy that would allow for exploitation of a prescription drug safety net program designed for our community’s most vulnerable.
The federal 340B Drug Pricing Program was originally created to help lowincome, underinsured and uninsured patients access their needed medications. The program requires drug manufacturers to give discounts on outpatient prescription drugs to certain health care organizations, including covered entities such as hospitals and for-profit contract pharmacies. The intent of 340B was for these covered entities and contract pharmacies to pass the savings they receive on to patients to help them afford their medication.
Unfortunately, the 340B program no longer serves its intended purpose and has turned into a profit driver for big pharmacies and hospitals. Today, Walgreens and CVS account for 60% of contract pharmacies, raking in huge profits from 340B discounts without passing those savings along to patients. A 2020 report found that the average profit margin on 340B medicines dispensed through contract pharmacies was an astonishing 72%, compared with just 22% for non-340B medicines.
In addition to these huge profits, covered entities don’t have to report how they are using 340B drug discounts to benefit patients in need. In fact, 53% of 340B hospitals in Missouri are below the national average for charity care levels and only 32% of contract pharmacies in Missouri are in medically underserved areas. More than half of what are known as Disproportionate Share Hospitals in Missouri — those serving a certain number of low-income Medicare and Medicaid beneficiaries — earn more in estimated 340B profit than they spend on charity care.
Meanwhile, the Rural Referral Center or RRC hospital designation is one of fastest growing types of 340B-covered entities, and is a loophole for 340B participation. However, RRCs do not have to be in rural areas or even treat rural patients to qualify to participate in the 340B program. A new report found that 82% of currently enrolled 340B RRCs are in urban areas, and 77% of their patients reside in urban areas.
How can these contract pharmacies and covered entities be fulfilling the intended purpose of 340B if they are not even located where the neediest Missourians reside?
The 340B program was established with the intent to serve vulnerable patients but is now rife with fraud and abuse — and Missouri is considering legislation that would further increase profits for these entities instead of helping ensure access and affordability for vulnerable patients.
Missouri Senate Bill 751 would enable increased exploitation of 340B and allow unlimited and unregulated use of contract pharmacies in Missouri without enacting any guardrails to prevent widespread abuse within the program. Legislators in Missouri should not support S.B. 751, which would increase profits for big retail pharmacies, pharmacy benefit managers and hospitals, instead of prioritizing needy patients. Our lawmakers should instead focus on patientcentered reforms that help the most vulnerable people in our community access their medicines.