NACHC Calls for Exemption from 340B Rebate Model That Threatens Patient Care
BETHESDA, MD—The National Association of Community Health Centers (NACHC) is calling on pharmaceutical manufacturers and the Health Resources and Services Administration (HRSA) to exempt Community Health Centers (CHCs) from the upcoming 340B Rebate Model Pilot Program, warning that the proposed changes could jeopardize access to life-saving medications for millions of low-income Americans.
NACHC has galvanized thousands of CHC professionals and patients from around the country to raise awareness about how the rebate model pilot threatens the availability of affordable medications for patients and fundamentally shifts how CHCs access 340B savings. To date, CHC supporters have already sent more than 35,000 emails asking drugmakers to drop the rebate model and HRSA to exclude CHCs from the rebate model pilot program set to launch next month.
The 340B Drug Pricing Program has served as a vital lifeline for CHCs for more than three decades, enabling them to provide affordable, often free, medications to low-income patients with chronic illness. The program’s upfront discounts have been the bedrock of CHCs’ financial stability, allowing them to stretch scarce federal resources and reinvest savings into critical primary care services. Under the rebate model, CHCs would be forced to pay the full Wholesale Acquisition Cost (WAC) for certain covered drugs upfront, then submit extensive purchase and claims data and wait for manufacturers to issue rebates.
In addition to appeals to HRSA and drug manufacturers participating in the rebate program, NACHC CEO Kyu Rhee, MD, MPP, has also called on Walgreens to reconsider its decision to stop processing 340B contract pharmacy claims for drugs in the pilot program, noting that 86% of CHCs rely on contract pharmacies to serve patients across hundreds of zip codes.
“This impact will be especially severe in rural communities where CHCs serve 1 in 3, and rural patients have much higher rates of hypertension, heart disease, and diabetes,” wrote Dr. Rhee in a letter to Walgreens CEO Mike Motz. “These arrangements leverage the footprint of large chains like Walgreens to assist patients who often face transportation and other non-clinical barriers to care. The recent decision by Walgreens will have a significant impact on these patients and the CHCs that serve them.”
The proposed rebate model threatens to:
- Create cash flow crises by forcing CHCs to pay high upfront costs they cannot afford
- Reduce the volume and range of drugs CHC pharmacies can stock
- Eliminate steep medication discounts required by law for underserved populations
- Impose costly administrative burdens during an existing workforce shortage crisis among CHCs
CHCs currently serve 52 million or 1 in 7 Americans, including over 20 million people in poverty and 1 in 3 rural residents. Ninety percent of CHC patients nationwide live at or below 200% of the federal poverty level, and many disproportionately suffer from chronic conditions such as diabetes, heart disease, and kidney failure—precisely the conditions treated by drugs included in the rebate pilot.
About NACHC
NACHC’s mission is to champion Community Health Centers delivering affordable, effective, comprehensive primary care that is community-driven and improves health for all.