Since the Brockton Neighborhood Health Center opened its pharmacy more than a year ago, the facility has acted as an oasis for a community severely lacking pharmacies.
As CVS, Walgreens, and Rite Aid have closed hundreds of stores across the state in recent years, nonprofit community pharmacies like the one in Brockton (and others in Dorchester, South Boston, and Roxbury) have stepped up to fill the void.
But they face an uncertain future. Pharmaceutical companies and front-line providers have been fighting over a fast-growing federal program that these centers rely on, and that costs the drug industry tens of billions of dollars each year.
The program, known as 340B, allows community pharmacies to purchase drugs at deep price discounts. However pharmaceutical companies have been putting strong pressure on Congress To limit how community pharmacies distribute high-cost drug treatments to patients outside their physical facilities. At a recent congressional hearing, some lawmakers said they might support restricting the program, which could hurt the finances of places like the Brockton Center.
Meanwhile, in the Massachusetts House of Representatives, a lawmaker recently introduced an industry-backed amendment that severely restricts how 340B pharmacies can use such discounts. Observers say there’s a good chance at least some of these initiatives could pass this year.
Efforts to cut that program could not only deprive patients of affordable, life-saving medications but also cut off an important source of revenue for community pharmacies, said Tom Siepka, director of pharmacy at the Community Care Cooperative, a Boston-based organization that supports health centers.
“Without it, I don’t know how these pharmacies can stay open,” Siepka said. “The program is a critical lifeline.”
Founded in 1992, the drug discount program requires drug makers to offer discounts of up to 25 to 50 percent to hospitals and pharmacies that serve relatively high numbers of low-income people. Patients.
Downtown Brockton The company fills about 75 percent of its prescriptions through these federally mandated discounts, and the savings are reinvested in lower drug prices for patients, new technology, interpreters, and free home delivery.
“Patients can get their medications faster, more efficiently, in a language they understand and with a team they trust,” said Chief Medical Officer Joseph Panerio-Langer.
Danielle McGrath considers herself very lucky. The 32-year-old only has to walk 10 minutes once a week to pick up her prescriptions and speak to a pharmacist in downtown Brockton.
“The people there are so helpful,” McGrath said. “It’s a lot easier to get my medications now.”
A patient picks up a prescription at the Brockton Neighborhood Health Center’s pharmacy. As pharmacies, both corporate and independent, close in underserved communities of color, the Brockton Neighborhood Health Center stands out as a rare success story. Jessica Rinaldi/Globe Staff
Today, the pharmacy serves about 39,000 patients and dispenses about 1,000 prescriptions a day — more than three times the volume of an average CVS or Walgreens. The store even employs a high-tech robot to organize deliveries.
However, the rapid expansion of the discount program has drawn the ire of the pharmaceutical industry, which pays for 340B in full. In 2022, healthcare organizations purchased $53.7 billion worth of discounted outpatient drugs, up from $9 billion in 2014, government data show. 340B now represents the largest federal prescription drug program.
One reason for this explosive growth is the rapid emergence of “specialty medicines,” a term developed by the industry to describe innovative, high-cost treatments for chronic and complex diseases such as cancer, rheumatoid arthritis, HIV, and hepatitis C.
Over the past decade, specialty drugs have become a boon for major pharmaceutical companies such as Merck, Johnson & Johnson, Pfizer, and Eli Lilly. Today, these drugs account for more than 50 percent of all drug spending, a figure that exceeds $300 billion.
Many hospitals and community pharmacies, like the one in Brockton, that receive federally mandated discounts, can’t sell specialty drugs because they lack the expertise to administer such sensitive treatments, which can carry potentially significant side effects. Instead, they contract with for-profit retailers Walgreens, CVS, Walmart, and Rite Aid to fill these prescriptions and split the fees.
Such deals, combined with a change in the Affordable Care Act that allowed providers to contract with an unlimited number of pharmacies to obtain cheaper drug prices, have contributed to a rapid expansion of pharmacies receiving the discounts — 30,000 in 2021 compared with fewer than 1,300 in 2010, according to an analysis by the Drug Channels Institute.
Alarmed by rising costs, the pharmaceutical industry has been fighting back, saying the federal rebate program has strayed from its original purpose.
“Since 2010, we’ve seen the program become a revenue stream for hospitals and the pharmacies they interact with,” said Nicole Longo, a spokeswoman for the Pharmaceutical Research and Manufacturers of America. “We want to get the discounts to the patients who need them, which are low-income and uninsured patients.”
Pharmaceutical giant Pfizer is funding efforts by Boston-based Pioneer Institute to track 340B rebates. The free-market think tank compiled data that says 61 percent of those pharmacies in Massachusetts are located in wealthy neighborhoods, including Wellesley and Swampscott. Patients there often have private insurance, which pays higher rates for drugs that pharmacies purchase at the same discounted price as for Medicaid patients.
Drugmakers have been lobbying officials to limit the number of pharmacies a hospital or healthcare facility can contract with to just one, according to the Congressional Research Service.
Congress is also considering several bills aimed at reforming the program. A bipartisan group of senators has drafted a bill that would Codify the obligations of drug manufacturers to sell medicines at reduced prices but also require regular audits.
Pharmacist Damian Mitrano refilled Parata, the robotic medication dispensing system at the Brockton Neighborhood Health Center pharmacy. Jessica Rinaldi/Globe Staff
In June, a Republican-led House subcommittee noted support for a bill The pharmaceutical industry is backing a proposal that would require hospitals to report on how they use savings from rebates. It would also clarify eligibility requirements in a way that could restrict rebates.
Siepka from Boston Community Care Cooperative said any effort to restrict the number of pharmacies providers can contract with will ultimately hurt the finances of places like the Brockton clinic.
Pharmacies often lose money on drugs because the payments they receive from insurance companies do not cover the full cost of purchasing and administering prescriptions. Therefore, outsourcing discounted specialty drugs offers them a crucial source of revenue.
“For many of these pharmacies, their finances are hanging by a thread,” Siepka said.
Experts say nonprofit community pharmacies need to survive, especially as CVS, Walgreens, and Rite Aid continue to close locations. They could never replace the big chains — CVS only operates about 400 pharmacies in Massachusetts, while there are roughly 50 community health centers — but these mission-driven facilities can ease the damage when for-profit pharmacies close.
“We believe the solution to pharmacy closures is to invest in health centers and expand their pharmacies,” said Michael Curry, executive director of the Massachusetts League of Health Centers.
The financial stability of these centers is therefore essential for patients.
Ellen Lapre, 61, who needs treatment for conditions related to blood pressure, cholesterol, and thyroid, recently decided to switch from a CVS in Bridgewater to downtown Brockton.
“The staff (at Brockton) is amazing,” Lapre said. “They didn’t seem to care about the result or what insurance you had. They just wanted to make sure you got your medications.”
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