Community health centers rely on the 340B Drug Pricing Program to provide affordable medications and comprehensive services to patients. Although all health centers offer pharmacy services, not all operate their own pharmacies. Most health centers rely on contract pharmacies to ensure their patients can get their medications at their preferred pharmacy.
What are contract pharmacies and how do health centers use them?
About 56% of health centers in the country operate in-house pharmacies,¹ but many health centers don’t because of the significant investments required to start and maintain them. Health centers often partner with contract pharmacies to expand access to medications for patients. Contract pharmacies are registered with the 340B program and dispense 340B-priced medications to patients of health centers on their behalf.
According to a study by the National Association of Community Health Centers (NACHC), 86% of community health centers rely on contract pharmacies to expand medication access for their patients.²
How are drug manufacturers interfering with contract pharmacies and harming patients?
Beginning in August of 2020, major drug manufacturers started restricting the use of contract pharmacies. By the end of 2024, 23 drug manufacturers had placed restrictions on contract pharmacies for health centers. Manufacturers have refused to ship 340B-priced medications to contract pharmacies or made shipments contingent on health centers turning over certain claims data.
In Tennessee, these restrictions are harming patients:
- Patients are now required to drive farther or drive to multiple pharmacies to get their 340B-priced medications.
- Patients have had to be switched from one medication to another, even if it’s less effective.
- When patients lose access to 340B pricing, they may even ration or forego taking medications.
The 340B program at health centers is a lifeline for patients who otherwise wouldn’t be able to afford or access their medications. Drug manufacturers have been undermining the program, and patients are the ones paying for their actions.
¹National Association of Community Health Centers. (2022). 340B: A Critical Program for Health Centers.
²National Association of Community Health Centers. (2022). 340B: A Critical Program for Health Centers.
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