With over 30 years of experience working for non-profit health systems, Lisa Fratesi gives us a firsthand account of the 340B Program’s tremendous impact since its start, how it has evolved, the challenges 340B covered entities face today, and what her organization is doing to #Defend340B.
How 340B Started
In 1992, section 340B of the Public Health Service Act enabled covered entities to purchase and dispense covered outpatient drugs to qualified patients at significantly discounted prices. Examples of covered entities include community health centers, Ryan White clinics, disproportionate shared hospitals, children’s hospitals, and other public health safety net providers.
The drug discount savings meant that covered entities that had previously been providing public health care to uninsured and underserved patients could continue to do so utilizing the savings they received through the 340B Drug Pricing Program.
The [340B] savings for the covered entity is a necessary lifeline; these discounted prices result in a barely noticeable decrease in revenue [for drug companies] and will only be missed by investors and top-paid executives. As a patient told me one day when I was dispensing her medication, “This might not seem like much to you, but for me, it is lifesaving.
– Lisa Fratesi
In short, the 340B Program helps stretch scarce federal resources for covered entities.
How Is 340B Today?
Before recent drug company restrictions on 340B, Lisa described the program as straightforward, with covered entities able to use the savings from 340B discount drug purchases to care for patients. For example, hospitals could provide services such as burn care, psychiatric care, and neonatology (care for newborn infants) to individuals who otherwise wouldn’t have local access to these services.
Mississippi has the highest poverty rate in the U.S., which correlates to poor health outcomes and patients needing financial assistance. Singing River Health System relies on the 340B program to care for all patients regardless of their ability to pay.
– Lisa Fratesi
Since 2020, when drug companies began their unilateral restrictions on 340B, Lisa has seen these three services threatened and even eliminated in Mississippi Hospitals due to the reduction in 340B savings.
The estimated impact from 340B drug sales represented a mere 3.1% revenue reduction for drug companies in 2022. In the same year, these multinational drug companies saw revenue of $1.4 trillion.
Today, drug companies have made it increasingly cumbersome or impossible for covered entities to access the 340B drug discounts they need to continue providing care. This is devastating for covered entity healthcare providers, considering the 340B program’s net impact on drug sales is negligible compared to Pharma’s large profits.
As not-for-profit organizations, every single bit of margin we can eek out is reinvested in our people, facilities, and providing care to our patients. We are committed to our communities and our patients.
– Lisa Fratesi
The 340B Program’s Impact
Lisa sees the impact of the 340B program on a daily basis. Her team works to identify patients who would not have access to basic medications and healthcare and tries to ensure those patients who need help the most receive services.
Take the mental health crisis, for example. The wait time for an inpatient psychiatric bed is unreasonable because nearly all other hospitals in the state of Mississippi have eliminated psychiatric services for these patients. As part of their mission to improve health and save lives, Lisa’s organization, Singing River Health System, has opted to continue providing care for these patients so they can get better in a safe environment.
Rising To Meet 340B Challenges
Both Lisa and her organization work to strengthen relationships and educate our Congressional representatives on the negative impact drug company restrictions have on Mississippi’s poorest, most underserved patients. The organization defends 340B by sharing real-life patient examples that speak to the truth of the situation with key policymakers and lawmakers whose views are tainted by false allegations fabricated by drug companies.
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