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March 12, 2021

Access to Affordable Insulin and Epinephrine Autoinjectors Through Federally Qualified Health Centers

Author Affiliations
  • 1Internal Medicine Residency Program, UPMC, Pittsburgh, Pennsylvania
  • 2Division of General Internal Medicine, Department of Medicine, University of Pittsburgh School of Medicine, Pittsburgh, Pennsylvania
JAMA Health Forum. 2021;2(3):e210313. doi:10.1001/jamahealthforum.2021.0313

On July 24, 2020, former US President Trump signed the “Executive Order on Access to Affordable Life-Saving Medications,” which aimed to improve the affordability of insulin and injectable epinephrine. This executive order applied to federally qualified health centers (FQHCs), a group of nearly 1400 health centers across the country serving approximately 30 million Americans. The executive order requires FQHCs to pass along to patients their 340B discounts on insulin and injectable epinephrine. Initially intended to take effect in January 2021, implementation of this executive order has been delayed until March 22, 2021, pending further review by the Biden administration. However, despite its good intentions, the executive order is unlikely to substantially improve the affordability of these medications.

FQHCs and the 340B Program

Federally qualified health centers are outpatient clinics supported by the Health Resources and Services Administration (HRSA) that provide primary care or specialty services to individuals and communities who are underserved.1 All FQHCs receive federal funding to deliver ambulatory care to children and adults in lower income brackets and address unmet community health needs.1,2 Per program requirements, FQHCs may charge fees but must first ensure the patients can afford care, and most patients at FQHCs are eligible for discounted primary care services.1-3

Importantly, FQHCs access discounted outpatient drugs through the 340B Drug Pricing Program. This program allows certain health care organizations that disproportionately serve patients with low incomes to obtain outpatient medications at substantially reduced prices.4 These organizations can then pass on the savings to patients who are uninsured or underinsured via free or discounted medications. Alternatively, they may dispense the drugs at market price to patients with Medicare or commercial insurance to generate additional revenue.

Implementation of the Executive Order

Rules implementing the executive order were finalized by HRSA and are currently under review by the Biden administration. Prior to the enforcement date, patients with low incomes and without insurance can already obtain insulin and epinephrine autoinjectors at FQHC-affiliated pharmacies at the 340B discounted price or less. For patients with commercial insurance, the FQHC-affiliated pharmacy can file a claim with the patient’s prescription drug plan to cover the medication. These patients with commercial insurance often pay some cost sharing, but the FQHC has the discretion to dispense the medication at the 340B price or less if the medication cost is prohibitive.

After implementation, the new rules will require FQHCs and their contracted pharmacies to establish written practices providing insulin and injectable epinephrine at or less than the 340B price to all patients in FQHCs earning less than 350% of the federal poverty limit ($44 600 for an individual in 2021) who have either high cost sharing; a high, unmet deductible; or no health insurance.5 While 340B prices are confidential and fluctuate quarterly based on product and formulation, insulin is typically available for less than $10 a month and substantially less in some cases.

Outcome for Patients

Despite the good intentions behind the new HRSA rules, they may have only minimal benefit for 3 reasons. First, the rules apply only to patients at FQHCs, limiting the scope to at most a fraction of US individuals who use these medications. In total, FQHCs provide care to about 9% of Americans, and only patients with an established relationship with an FQHC may access 340B discounted medications.6 Existing statutes prohibit FQHCs from diverting 340B drugs to patients who are ineligible, such as those without an established relationship who visit the FQHC solely to obtain discounted prescriptions. Notably, the new rules do not alter patient eligibility criteria for 340B medications.

Second, FQHCs are already required to ensure that medications are affordable for their patients.1 For example, more than 90% of patients at FQHCs currently receive discounted care and are protected by HRSA-required discounts from high cost sharing and unmet deductibles when accessing medications through primary care.1,3 To be sure, the recent HRSA rules introduce a new category of patients (ie, those with incomes at 200% to 350% of the federal poverty level) who were less likely to have received heavily discounted insulin and epinephrine autoinjectors prior to the executive order. These patients may now benefit under the HRSA rules. However, we estimate only 170 000 patients with diabetes at FQHCs are in this income category, of whom about 20% may require insulin and be newly eligible for 340B discounts based on health center data. While FQHCs had the option to dispense medications to these patients with higher incomes at discounted prices, the HRSA rules codify this option into a requirement, providing explicit cost-sharing protections to the albeit small number of patients in this category.

Third, by decreasing 340B revenue, the new HRSA rules may lead to decreased revenue for FQHCs and thus paradoxically limit their ability to provide care for their patients with the lowest incomes. In 2019, FQHCs spent $31 billion for clinical and support services. They collected $6.4 billion from Medicare and commercial insurance for patients with insurance, which offset about 20% of the overall cost of care.3 Generating this revenue in part requires FQHCs to bill patients with insurance at the market price for insulin and epinephrine, an ability compromised by inclusion of patients with incomes in the newly added 200% to 350% federal poverty level category. This change may reduce revenue for other critical services provided for patients who are underserved.

Building a Framework for Affordable Medications

Regrettably, the new HRSA rules reformat preexisting requirements but do little to improve the affordability of insulin and injectable epinephrine. The rules target a small population at FQHCs, where many protections are already in place to reduce cost sharing. Moreover, they remove an important source of revenue for FQHCs that allow them to provide other services for individuals in the US with low incomes. Ultimately, regulatory changes like these rules are only bandaids for the ongoing challenges faced by patients to afford essential medications. Drug manufacturing in the US experiences substantial regulatory, financial, and market barriers to generic entry that have led to rapid increases in prices. The Biden administration should reconsider enforcement of this executive order and focus instead on supporting generic entry for insulin and injectable epinephrine to create a more competitive environment in which these life-saving medications are more affordable for the US patients who rely on them.

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Article Information

Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2021 Rangavajla G et al. JAMA Health Forum.

Corresponding Author: Jing Luo, MD, MPH, Division of General Internal Medicine, Department of Medicine, University of Pittsburgh School of Medicine, University of Pittsburgh, 3609 Forbes Ave, Second Floor, Pittsburgh, PA 15213 (luoj@pitt.edu).

Conflict of Interest Disclosures: Dr Luo reported grants from the National Institutes of Health/National Center for Advancing Translational Sciences and the US Centers for Disease Control and Prevention/Allegheny County Health Department during the conduct of the study and personal fees from Health Action International and Alosa Health outside the submitted work. No other disclosures were reported.

References
1.
Health Resources & Services Administration. Health center program compliance manual. Published 2018. Accessed March 4, 2021. https://bphc.hrsa.gov/programrequirements/compliancemanual/index.html.
2.
United States Congress. United States code: health centers, title 42, chapter 6a II, part D. https://www.law.cornell.edu/uscode/text/42/254b
3.
Health Resources & Services Administration. 2019 Health center data. Published 2020. Accessed March 4, 2021. https://data.hrsa.gov/tools/data-reporting/program-data/national/table?tableName=Full&year=2019
4.
Conti  RM, Bach  PB.  The 340B drug discount program: hospitals generate profits by expanding to reach more affluent communities.   Health Aff (Millwood). 2014;33(10):1786-1792. doi:10.1377/hlthaff.2014.0540PubMedGoogle ScholarCrossref
5.
Department of Health and Human Services. Implementation of executive order 13937, “executive order on access to affordable life-saving medications.” Published 2020. Accessed March 4, 2021. http://www.regulations.gov/document/HRSA-2020-0004-0001
6.
Health Resources & Services Administration. Notice regarding section 602 of the Veterans Health Care Act of 1992 patient and entity eligibility. Published 1996. Accessed March 4, 2021. https://www.hrsa.gov/sites/default/files/opa/programrequirements/federalregisternotices/patientandentityeligibility102496.pdf
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