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Get to Know 340B: PBMs and the PROTECT 340B Act
| TPCA endorsed the PROTECT 340B Act, a bill that would preserve a core program for health centers, ensuring patients can access medications and services. Read on to learn more about why this bill is needed and what you can do to advocate for its passage. |
| Health centers purchase outpatient medications at a discount through the federal 340B drug pricing program and invest all savings into patient care. Savings from the 340B program ensure health centers can provide affordable medications and comprehensive services to all patients, regardless of their ability to pay. |
| How are PBMs interfering with the 340B program? |
| Over the past several years, third parties such as drug manufacturers, insurers, and pharmacy benefit managers (PBMs) have implemented strategies to prevent health centers from retaining 340B savings. These third-parties are ‘pick-pocketing' the savings for themselves at the expense of community health centers and their patients. Pharmacy benefit managers (PBMs) manage prescription drug benefits on behalf of health insurers. PBMs negotiate with drug manufacturers and pharmacies to control spending which gives them influence over drug costs, patients' access to medications, and reimbursement to pharmacies.1 PBMs engage in ‘pick-pocketing' by reimbursing less for medications simply because they were purchased under the 340B program, imposing additional fees on 340B entities, implementing burdensome auditing practices that lower reimbursement, and restricting contracts.2 |
| How do actions by insurers and PBMs affect community health centers? |
| Tennessee's health centers rely on the program to ensure patients can afford medications to treat chronic conditions such as diabetes, and support services such as behavioral health and substance use disorder treatment, dental services, and OB/GYN care. Efforts by insurers and PBMs to ‘pick-pocket' health center savings stress the ability of community health centers to ensure patients can access critical, life-saving medications and comprehensive services. According to a report by the National Association of Community Health Centers (NACHC) without the 340B program, eighty-two percent of health centers said access to health care for low-income patients along with rural patients would be most impacted by cuts to the 340B program.3 Nearly one-third of health centers said that more than half (56%) of their patients would go without needed medications without the 340B program.4 |
| What is the PROTECT 340B Act? |
| The PROTECT 340B Act, introduced by Representatives Abigail Spanberger (D-VA) and David McKinley (R-WV), would prohibit insurers and PBMs from engaging in practices that allow them to retain savings that are intended for health centers. The bill would ensure third-parties cannot treat 340B providers like health centers differently than other providers when it comes to reimbursement, fees, contracting, and auditing practices. The bill also protects patient choice, ensuring they can receive their medications from a 340B pharmacy. Tennessee is one of many states across the country that have passed state bills to prevent ‘pick-pocketing' practices. However, states do not have the authority to regulate Medicare, the federal health insurance program that covers people aged 65 and older, certain people with disabilities, and people with End-Stage Renal Disease.5 The PROTECT 340B Act would extend protections to drugs covered under Medicare and ensure protections extend nationwide. |
| What can you do to support 340B? |
| The PROTECT 340B Act is gaining momentum in Congress. Tennessee's Congressman John Rose (R-6) and Congresswoman Diana Harshbarger (R-1) signed on as co-sponsors of the PROTECT 340B Act of 2021. However, we must continue to urge member of the House to support the PROTECT 340B Act and preserve a key health center program. Please reach out to your members of the House and ask them to support the PROTECT 340B Act. |
| Ask your member of the House to support the PROTET 340B Act >>> |
| [1] Commonwealthfund.org. 2019. Pharmacy Benefit Managers and Their Role in Drug Spending | Commonwealth Fund. Available at: https://www.commonwealthfund.org/publications/explainer/2019/apr/pharmacy-benefit-managers-and-their-role-drug-spending |
| [2] National Association of Community Health Centers. (2022). 340B: A Critical Program for Health Centers. Retrieved from https://www.nachc.org/wp-content/uploads/2022/06/NACHC-340B-Health-Center-Report_-June-2022-.pdf |
| [3 ]Ibid. |
| [4] Ibid. |
| [5] What's Medicare? | Medicare. (2022). Retrieved from https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare |