Discount drug program sparks debate

A long-running disagreement between the Northwest Community Health Center and pharmacists from across Lincoln County concerning participation in a federally funded drug program came to a head Tuesday when pharmacists peppered the health center’s director with questions during an economic prosperity forum.

The program, known as 340B, allows health care providers to offer prescription drugs at a significantly reduced price. It was intended to benefit low-income customers, but patients with Medicare or private insurance can also use the program to buy cheap drugs that are subsidized by the federal government. The health center could open participation in the program to every pharmacy in the county, but Maria Clemons, the health center’s director, said her nonprofit, government-funded organization was not prepared to do that. Instead, the health center has an exclusive contract with Granite Pharmacy in Libby. With only one pharmacy selling dramatically discounted drugs, other pharmacists say they are competing in an unfair market.

Misuse of the federal program has sparked governmental and pharmaceutical industry review. In 2011, the Government Accountability Office, the investigative body for Congress, characterized federal oversight of the program as insufficient.

In the case when privately insured patients purchase discounted drugs, it is legal for health centers to charge insurers the full price of the drug. In that situation, health centers across the nation pocket the difference after paying the pharmacy a dispensing fee. As a matter of policy, Clemons said Granite Pharmacy always checks to see if patients could save money by buying the drugs through the 340B program.

“Any sale of 340B medication is Health Center revenue,” Clemons said. Clemons said she could not discuss how much revenue the health center generates from the 340B program due to contractual obligations.

Michael Wells, a pharmacist at Kootenai Drug in Troy, said the exclusivity agreement between the Northwest Community Health Center and Granite Pharmacy forces him to send customers to Libby to get their discounted drugs.

“We don’t want to create a conflict, but our customers are not being served,” Wells said. “Every day we talk to people who say they wish they could get their prescriptions with us, but cannot afford it. People should choose their pharmacy based on comfort and a professional relationship, not on cost. For the health center to directly compete with the private sector is outrageous.”

 Pharmacists’ concerns increased when the health center announced plans to hire a clinical pharmacist. By filling prescriptions in-house, the health center will make outside pharmacies not participating in the 340B program obsolete, critics say.

“When (the health center’s) pharmacy goes in, it will almost certainly cost local pharmacy jobs and make a business go under, unnecessarily,” Wells said.

Still, health center employees say this is much ado about nothing.

“There is nothing new about this,” Joe Chopyak, a physician’s assistant at the health center said. “We’re just going to have that resource in the house now, where I as a provider have direct access to the people handling the medicine. We’ve already had the pharmacy, that’s not new.”

Clemons said hiring a clinical pharmacist will give the health center an opportunity to review a patient’s health record and pharmacy record, a level of detailed care she said a retail pharmacist does not always have the time to perform. While pharmacists have asked for years to get involved in the program, Clemons explained why the health center does not participate with every pharmacy in the county.

In 1996, participating health centers were allowed to contract with a single outside pharmacy to fill 340B prescriptions. In 2010, the Health Resources and Services Administration changed the rules to allow contractual agreements with multiple pharmacies. The health center originally contracted with Granite Pharmacy, previously known as Frank’s Pharmacy. The exclusive agreement continues despite the looser restrictions.

“We started the model in a virtual way, we didn’t purchase medicine,” Clemons said. “We used his stock, it was a replenishment model. Honestly, it killed the pharmacy from a business standpoint. What happens in that model is, they sell their drugs and hold that inventory until they hit a certain mark and then the 340B fills in the back end of it. So the local pharmacy was out of their own inventory until they filled enough of our drugs. That seems like a crazy model, and we really hurt our partner. At that point, we invested quite a bit of money in inventory so we would not put our partner out.”

Clemons said an opportunity to change the exclusivity of the agreement was declined due to oversight concerns.

“The downside of that is we are still the eligible entity; we are still responsible for the dispensing of that medication. If anything happens, we are on the hook for that. To answer your questions really directly, we could (participate with every pharmacy in the county), we just don’t think it’s the right business decision for us today. My concern is that we have a lot of irons in the fire.”

Clemons said her goal is providing optimal customer care. Shortly after clinical coordinator Nicky Willey said she has never had a patient mention dissatisfaction with the health center’s exclusive relationship with Granite Pharmacy during her seven years working directly with patients at the health center, Chopyak said he absolutely hears such statements.

“I’ve had patients come in and say they don’t want to do business at Granite,” Chopyak said. “Maybe they don’t like the color on the walls, doesn’t matter to me. That’s their choice. But that doesn’t mean we have to give that patient access to our program wherever they want to go. There has to be some reasonable limits. We simply cannot afford to divide this pie up amongst all the pharmacies. Have stock of those drugs in all those pharmacies; try to manage all of that inventory? We know that would fail. As hard as a decision as this, it is just not reasonable for us.”

Critics of the exclusive agreement point to a burgeoning agreement between Cabinet Peaks Medical Center and every pharmacy in the county to participate in the medical center’s 340B-eligible comprehensive care program.

Trevor Erickson, owner of Eureka Drug, said he spoke with the medical center Thursday about contracting for participation in 340B. He said customers sometimes complain about traveling so far for their drugs at Granite Pharmacy. Erickson reached out to the health center multiple times in the past about participating in 340B, but talks went nowhere.

“I can confirm that we have recently reached out to all the pharmacies in the county,” said Kate Stephens, Cabinet Peaks Medical Center’s marketing director. She said the medical center and health center operate in different ways.

Stephens said she could not comment on the medical center’s views on the financial viability of a countywide agreement. She also declined to comment on how often the medical center engages in business practices it views as unsustainable.

Michelle Vincent, a pharmacist at Rosauers, said she wants to collaborate, not compete, with the health center and looks forward to working with the center in the future.

“I think it’s awesome Cabinet Peaks offered its 340B program to all the pharmacies,” Vincent said. “I have no doubt that we have lost patients to the exclusive deal. No matter how much customer service we provide, it doesn’t outweigh the savings a customer can get with 340B.”