In 1992, section 340B of the Public Health Service Act was created by Congress in an effort to help vulnerable or uninsured patients get access to prescription medication. The act, which is commonly referred to as 340B, requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at a discounted price to health care organizations that care for a large proportion of low-income or uninsured patients. This program generates valuable savings so that safety net providers can reinvest in programs to provide patient care and expand access to care.
Retail prices for drugs have been rising for years. According to a JAMA study, 78% of the medications they studied saw an increase in cost by more than 50%. And 44% more than doubled in price from 2012 to 2019. The study also projects that these prices will continue to go up.
“Here you are, with a prescription, and you’re going to pay the highest price available. That impacts a lot of people’s ability to obtain the medication,” said John Bretz, director of strategic relations for SUNRx.
Job losses brought by COVID-19 has only exacerbated this issue. In the first four months of the pandemic, an estimated 660,000 Texans lost their health insurance. According to data from the Bureau for Labor Statistics, one in 10 people who come into a hospital in the U.S. do not have a way to pay for the care they receive or the medications they need.
Hospitals across the U.S. have saved around $6 billion through the 340B program. While these savings only represent roughly 1.5% of total drug spending, they still support essential resources like school-based health care, community-based oncology care, dialysis in rural areas, infusion therapy and other vital health care services for underserved populations.
SUNRx helps hospitals across the country maximize their 340B programs with innovative consulting solutions. This leads to improved patient care, compliance and reduced readmissions to emergency departments.
340B can be a solution to help address the economic issues that uninsured or underinsured patients face. But, according to surveys from SUNRx, only around 15% of hospitals nationwide make 340B prices available to the uninsured.
“An area of big opportunity for hospitals is an area of 340B often referred to as a cash program,” said Bretz. “It’s the notion of providing 340B discounts to the uninsured.” This is often referred to as a cash program because, in most cases, it’s used by patients who pay out of pocket for medical visits and pharmaceuticals.
High drug prices pose a serious problem for the uninsured, who are also more likely to be low income. “If you don’t have insurance, when the doctor gives you your prescription and you take it to a pharmacy, you have no discount. You pay retail, which is the highest price available,” said Bretz.
“Think of a discount at Costco or Sam’s Club, they’re able to pass discounts through to the customer,” said Bretz. “But it takes a certain technology to do this.” When it comes to health care, many third-party administrators don’t have this technology.
For hospitals and health care providers to accurately pass 340B discounts to their patients, the prices need to be in real-time. The uninsured or low-income patient must go to the pharmacy with a 340B prescription card that will work when the customer swipes it. And not only work, but it also has to work in real-time to reflect what the current 340B price is.
“This is a technology hurdle. Why so many hospitals don’t do it is because they tend to work with TPAs who cannot support it,” said Bretz. SUNRx was one of the innovators who first created this technology. Their solution allows hospitals to provide 340B prices to their patients in real-time.
Better Health Outcomes
According to surveys from the Centers for Disease Control, uninsured patients were most likely to ask their provider for a lower cost option for prescriptions. That same study also showed that uninsured patients were more likely to not adhere to their treatment plan, most often citing the cost of drugs as the reason.
Over one-third of uninsured patients surveyed cited rising drug costs as the reason for skipping doses, taking smaller doses or not taking their medication at all. Providing patients with discounts to drugs through 340B can have profound impacts on their health outcomes by helping maintain treatment adherence.
When patients don’t take their medications properly, it leads to unnecessary hospital admissions, illness and even death. According to the American Journal of Managed Care, patients not adhering to medication “costs the health care system an estimated $300 billion every year." The study also says that 5% of hospital admissions result from not taking medications as prescribed.
More alarming, studies from the National Institute of Health estimated that not adhering to medication claims the lives of approximately 125,000 Americans each year. Taking medications as prescribed leads to far better health outcomes, and also saves both patients and hospitals money in the long run.
“Hospitals have the opportunity to implement a cash program. With SUNRx, hospitals can do this revenue-neutral; it doesn’t cost them a nickel,” said Bretz. “You’re simply passing the savings on directly to the patient.”