HJAR May/Jun 2024

18 MAY / JUN 2024 I  HEALTHCARE JOURNAL OF ARKANSAS programs, subsidize expensive specialty care like labor and delivery departments, purchase or upgrade diagnostic equip- ment, and institute other gap-filling mea- sures to support underserved patients and promote overall well-being for patients and communities. Restricted Access Takes a Toll In 2020, drug manufacturers began implementing distribution policies that limited or prohibited covered entities from contracting with outside pharmacies for the dispensation of 340B drugs to patients. Some manufacturers sent notice to hospi- tals that only one contract pharmacy would be permitted to receive and dispense 340B drugs, and some required that the covered entity provide proprietary information to the pharmaceutical manufacturer before the manufacturer would allow contract phar- macies to receive and dispense 340B drugs. These manufacturer-imposed restrictions — and others — were designed to reduce the benefits of the 340B program to patients and covered entities and to keep drug com- pany profits high. Complying with these restrictions caused covered entities that are dependent on con- tract pharmacies to become unable to serve patients in need. Recognizing that hospitals were not the only covered entity suffering from the actions of the drug companies, the Arkansas Hospital Association joined forces with the Community Health Centers of Arkansas (representing federally quali- fied health centers), and theArkansas Phar- macists Association (representing contract pharmacies) to seek relief. Blazing a New Trail With well-informed and impassioned members of the Arkansas Legislature tak- ing the lead, Arkansas Act 1103 of 2021 was passed to prohibit drug companies from restricting covered entities’ use of con- tract pharmacies. The act was the first of its kind in the nation. Arkansas’ act gives enforcement authority to the Arkansas Insurance Department. Unsurprisingly, the For more than 30 years, the 340B Drug Pricing Program, which is federally admin- istered by the Health Resources and Ser- vices Administration (HRSA), has provided financial help to hospitals serving vulner- able communities. The program benefits are designed to be used not only to reduce the price of outpatient pharmaceuticals for patients but also to allow hospitals, and certain other healthcare organizations, to stretch scarce resources to expand health services to the patients and communities they serve. One of the best features of the program is that increased access to health- care through 340B program benefits comes frompharmaceutical manufacturers’profits — not fromAmerican taxpayers. The program takes its name from Sec- tion 340B of the Public Health Service Act, which requires pharmaceutical manufac- turers participating in Medicare and Med- icaid to sell outpatient drugs at discounted prices to certain healthcare organizations — known in the federal statute as “covered entities”— that care for many uninsured and low-income patients. These covered entities include HRSA-supported health centers and several types of hospitals, including critical access hospitals, sole community hospitals, children’s hospitals, rural referral centers, and public and nonprofit disproportionate share hospitals that serve low income and indigent populations. InArkansas, 31 of our 75 counties have no 340B hospitals, and most of our 340B hos- pitals are prohibited from owning a retail pharmacy permit under Arkansas law. In order to capture the benefits of the pro- gram, covered entities must rely on exten- sive partnerships with community pharma- cies to dispense 340B drugs to our patients. This, of course, makes contract pharmacies evenmore essential to the provision of 340B drugs for covered entities in Arkansas. In addition to providing discounted drugs to patients, Arkansas 340B hospitals use the program benefits to provide free care for uninsured patients, provide services in mental health clinics, implement medica- tion management and community health “In addition to providing discounted drugs to patients, Arkansas 340B hospitals use the program benefits to provide free care for uninsured patients, provide services in mental health clinics, implement medication management and community health programs, subsidize expensive specialty care like labor and delivery departments, purchase or upgrade diagnostic equipment, and institute other gap-filling measures to support underserved patients and promote overall well-being for patients and communities.”