Rochester Reporter

A prominent Hispanic business leader is urging the New York State Legislature to hold off on expansion of the 340B Drug Pricing Program, recently writing that the initiative “is not fulfilling its objectives and needs comprehensive federal reform.”

Julio Fuentes, president of the Hispanic Business Alliance, penned an op-ed column for the Rochester-based Democrat and Chronicle earlier this month which opined while the program – created in 1992 to lower the cost of outpatient prescription medicines for those in vulnerable and under-served minority communities – was designed with good intentions, it has not achieved its primary goal and those same communities are feeling the expensive effects of its underperformance.

One hundred and thirteen health care sources across New York currently participate in the 340B Program, which enables eligible hospitals and healthcare organizations to purchase outpatient medications at significantly discounted prices.

Entities affiliated with the 340B Program can then use the cost savings to fund essential services, such as free or low-cost medication assistance, expanded access to healthcare and community outreach initiatives.

But Fuentes said those communities most in need are not benefiting from the program’s intended savings, with patients reportedly spending two-and-a-half times more on medicines at 340B Program-affiliated health care groups than ones who are not enrolled in the program.

Fuentes elaborated on his concerns.

“Federal policymakers created the 340B Program in 1992 to lower the cost of outpatient medicines for uninsured and vulnerable patients being treated at safety-net health care entities through manufacturer discounts, but today its failing to reduce medication costs for the patients the program was designed to serve. Instead, patients are spending 2.5 times more on medicines at 340B program entities than at non-340B entities. The 340B Program is also driving the consolidation of physician practices into hospitals, which reduces the availability of community-based provider options and forces patients into higher-cost hospital settings,” Fuentes said.

“Today, 86% of 340B hospitals in New York are below the national average for charity care levels. There's also a significant number of 340B contract pharmacies that are not located in medically underserved areas, making it difficult for the intended beneficiaries to access the discounted medications.”

Fuentes further explained how these issues with the 340B program carry specific and strong impact to both Hispanic and other communities.

“These issues are particularly critical for Hispanic communities. Minorities – including Black, Hispanic and Native Americans – are up to two times more likely than White individuals to have major long-term conditions. This demographic faces greater barriers to affordable healthcare, making the failures of the 340B Program especially detrimental. The program’s inefficacy in reducing medication costs and the resulting increase in overall healthcare expenses exacerbate financial burdens on Hispanic families, who often have lower average incomes and higher uninsured rates. The consolidation of healthcare providers limits access to affordable, community-based care, which is crucial for these communities,” Fuentes stated.

In his op-ed piece, Fuentes also advised the New York State Legislature to reject Assembly Bill 7789 and Senate Bill 8992, both of which state they will “prohibit pharmaceutical manufacturers and pharmacy benefit managers from discriminating against covered entities and New York state pharmacies, based on participation in the drug discount program authorized by Section 340B of the federal Public Health Service Act.”

“In recent years, some pharmaceutical companies and pharmacy benefit managers have imposed certain requirements and limitations on New York 340B-covered entities, thus depriving such entities of much-needed cost savings. These practices discriminate against 340B covered entities and their pharmacy partners, and by extension the patients they serve. These discriminatory practices have the effect of limiting those covered entities’ ability to care for their communities fully and comprehensively,” per the text of Assembly Bill 7789.

However, Fuentes mentioned in the article that a Congressional investigation devoted to learning more about how health care groups participating in the 340B Program are spending their funds is now pending – and furthermore, that a coalition of health care patients and provides called the Alliance to Save America’s 340B Program has banded together in order to reroute cost savings to those most in need, as the program originally intended.

With these concurrent efforts underway at the federal level to reform the 340B Program, Fuentes explained, any further expansion of it within the State of New York would not be prudent at this time.

“While we appreciate the intent of proponents of this legislation to improve healthcare access and affordability in New York, unfortunately, these bills are premature. Efforts are underway at the federal level to address the disparities that currently exist in the 340B Program, and we urge state legislatures to wait until those changes are made before taking any action at the state level. Without comprehensive federal reform, expanding the program will only perpetuate and potentially worsen the issues of high medication costs, increased overall healthcare expenses and reduced access to community-based care,” he said.

Fuentes also pointed to a brand-new report from the North Carolina State Treasurer on the 340B Program, which illustrated high markups to benefit health care entities, rather than patients.

“North Carolina 340B hospitals charged state employees an average price markup of 5.4 times their discounted acquisition costs for outpatient oncology infusion drugs, significantly higher than non-340B hospitals. These markups resulted in exorbitant profits for hospitals, with some charging up to 12.7 times their acquisition costs for oncology drugs, putting considerable strain on the healthcare system. These practices disproportionately affect vulnerable communities, including Hispanic populations, who may rely on safety-net providers for essential healthcare services,” Fuentes said.