Magazine article Drug Topics

Federal 340B Drug Discount Program Stirs Interest and Fear

Magazine article Drug Topics

Federal 340B Drug Discount Program Stirs Interest and Fear

Article excerpt


Community pharmacy participation in the federal government's 340B discount drug program will take a big leap forward this summer when a New York State health clinic announces the first-ever participation by a chain pharmacy. Hudson Headwaters Health Network, which runs 11 clinics in the the state's Adirondack area, will sign an agreement with a chain that owns 120 stores in 19 states. John Rugge, CEO of Hudson, declined to identify the chain at the 340B Coalition conference in Washington, D.C., last month.

In an exclusive interview after the conference, Jimmy Mitchell, the director of the office of pharmacy affairs at the Health Resources and Services Administration (HRSA), said, "This is a tremendous opportunity for community pharmacy to step up to the plate and not view these 340B clinics as competitors, or some government-controlled operation."

Chain-is have ignored the 340B program because HRSA guidelines specify that a clinic with a 340B program can contract-hence the term contract pharmacy-with only one retail pharmacy. The director of pharmacies for one of the top five drug chains, who did not wish to be identified, said he would love to have access to the 340B program. His company already has a pharmacy in an AIDS clinic in the Midwest, which is a 340B participant (the chain doesn't supply 340B drugs to the clinic, however). "We would love to have access to 340B," he said. "But we have to be able to build market share in that area."

Hudson was given the OK to negotiate with a chain when it was accepted as one of the four participants in the "alternative methods demonstration" program, which Health & Human Services secretary Tommy Thompson green-lighted in June 2001. Only Hudson is experimenting with multiple contract pharmacies for its clinic sites. The expectation is that any of the Hudson clinic patients eligible for 340B drugs could get their prescriptions filled at any.of the chain's pharmacies.

The 340B discount drug program, administered by HRSA, provides drugs at an average discount of about 50% of average wholesale price to 9,193 community health clinics, AIDS clinics, health centers for the homeless, family planning clinics, and outpatient clinics run by disproportionate-share hospitals (DSH) nationwide.

When it began in 1992, the 340B program allowed distribution of these cut-price drugs only through in-house pharmacies. …

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