Cheap drugs net CHC $83K in revenue

Details continue to emerge in a disagreement between Northwest Community Health Center and area pharmacies concerning participation in a federal discount drug program.

County pharmacists commandeered an economic prosperity forum meeting last week to address concerns about the health center’s exclusive 340B Drug Discount Pricing Program contract with Granite Pharmacy.

Community Health Center Director Maria Clemons said she expected to hear from pharmacists at the meeting, but was disappointed by the approach.

“I am really disheartened that that is the tactic they want to take,” Clemons said. “I was very open about our decision-making process and why we went down the road we went down.”

Pharmacists in Libby, Troy and Eureka say they have tried unsuccessfully for years to meet in-person with Community Health Center management to discuss the implications of an exclusive 340B partnership. Pharmacists argue that they are left at an unfair disadvantage, trying to compete in a market against a nonprofit entity using a government program to increase revenue and compete with private-sector pharmacies.

Michael Wells, a pharmacist with Kootenai Drug in Troy, said he wrote a letter to the health center in September requesting a meeting with several other pharmacists. That request was denied in a Sept. 16 letter signed by Medical Director Dr. Jana Hall, Board Chair Terrie Noser and Clemons.

“The coordination and negotiation of individual services contracts is an operational matter, and it is the sole responsibility of our Executive Director, Maria Clemons,” the letter read.

The 340B program has been a hot topic in the medical field for years. A 2013 New York Times article detailed the ways the program is sometimes used by health centers to raise revenue. A story in the October edition of Health Affairs, a peer-reviewed healthcare journal, also examines how hospitals and health centers take advantage of the program.

While ostensibly created to make prescription drugs more accessible to low-income patients, the program can make revenue on all patients visiting the Community Health Center, including customers with Medicare or private insurance. While the health center can buy the drugs from pharmaceutical companies for a very steep discount due to government subsidies, it can pocket the difference when discounting an insured patient and charging the full price to the insurer.   

In an interview last week, Clemons said all 340B medication sales are Community Health Center revenue. She declined to comment on how much revenue the health center receives, citing contractual obligations.

However, public documents show the health center made $82,990 in pharmacy services revenue according to its 2012 tax filings. That compares to $88,123 of revenue from dental services and $2.6 million in medical services revenue.

With work underway for a $2 million expansion and plans to hire a clinical pharmacist in the coming months, other pharmacists are concerned the health center could make all the revenue from the program without the participation of any outside pharmacies.

“A federally subsidized entity should not be competing with the private sector, instead we should be working together as a community to provide optimal patient care,” Michelle Vincent, a Rosauers pharmacist, said. “We are hoping the CHC will have a change of heart to allow our customers to utilize their pharmacy of choice. We would love the opportunity to discuss the different ways the inventory could be handled if that is CHC’s concern.”

Pharmacists in Troy and Eureka say they hear grumblings from customers complaining that they can only get their 340B discounted drugs from Granite Pharmacy. In a county that is 3,675 square miles, some people live in areas far removed from Granite Pharmacy in Libby. Pharmacists fear customers will grow accustomed to picking up their prescriptions at Granite and stop frequenting their current, and sometimes more local, pharmacy.

Vincent acknowledged there is a lot of money to be made from the 340B program. She said pharmacies currently not participating in the program would only ask for a dispensing fee, which is normal for any participating pharmacy.  

County commissioners said they briefly discussed the topic during Wednesday’s meeting. Troy commissioner Greg Larson attended the economic prosperity forum last week, citing a desire to be sure that the county’s healthcare system is operating at a high level.

“None of us want to shop out-of-town if we don’t have to,” Larson said. “Hopefully they can get together on that and keep the money in town.”

County Commissioner Mike Cole of Eureka said he was learning more about the topics, but characterized himself as a “private-sector kind of guy.”

“It’s tough for the private sector to compete with the public dollar,” Cole said. “If other pharmacies are not included in the program, I can understand why they would have heartburn.”

Messages to reach Granite Pharmacy owner Eric Beyer went unreturned Monday. In a conversation last week, Beyer said his pharmacy’s top concern is providing optimal patient care, a statement echoed by Clemons.

Answering repeated questions from state Sen. Chas Vincent during last week’s economic prosperity meeting, Bruce Whitfield, Cabinet Peaks Medical Center CEO, said the medical center lost 10 employees shortly after opening a $34 million facility.

“The Community Health Center outsourced their lab work business,” Whitfield said. “We estimate about a third of our work. We lost three of the 10 employees in the lab.”

Clemons said her health center was one of the last local practices to use the medical center for lab work. She called it a matter of volume pricing and said she recently opened negotiations with the Cabinet Peaks to return lab work to their neighbor on Second Street.