Healthcare clinics and centers brace to lose millions from changes to 340B Program

ROCHESTER, N.Y. – Clinics and Healthcare Centers that cater to poor and underserved communities across New York State are in crisis mode.  A major change is set to take effect on April 1 that will trigger the loss of millions of dollars in revenue annually.

In an effort to save money on drug costs, New York State is planning a major overhaul of how Medicaid patients access prescription drugs.  The changes were approved back in 2020 but delayed until April 1, 2023. 

Over the last few decades, Trillium has become a one-stop shop for patients who need a little help beyond a simple doctor’s visit, “My primary care doctor is here, I use the pharmacy, I use the food pantry, I get just about everything here… my OBGYN care is here,” says patient Cheryl Mccullough. 

She and thousands of other Medicaid patients benefit from the wrap-around services Trillium offers but that could soon change, “It’s not hyperbole to say that there could be an increase in HIV in the community or hepatitis C services,” says Mark Malahosky, the Vice President of Pharmacy Services at Trillium, “We provide services for folks struggling with opioid addiction, some of those services are going to have to go away and could we experience an increase in opioid overdoses? Yeah, we possibly could.”

The threat is based off of changes the state wants to make to a federal program known as 340B.  Until now, federally qualified clinics and healthcare centers with pharmacies that serve the poor could buy their own medications to dispense, “We purchase the drugs at a discount and we get reimbursed at the regular prevailing market rate, the difference between the purchase price and what we get reimbursed becomes the revenue that we reinvest into the services that we provide to patients,” explains Malahosky.

Come April 1, New York State wants to take over the buying.  The state says it will create more transparency and give it more leverage to negotiate with drug manufacturers.  But it also means a $5 million loss annually for Trillium, a $40+ million loss for Rochester Regional Health and a $60+ million loss for UR Medicine. 

“It really means we’re gonna have to cut services that we provide. I mean it’s, math right? It’s going to lead to poorer health outcomes, particularly in communities with the greatest histories of health disparities, right so… the poor, communities of color, LGBTQ populations, patients with HIV,” Malahosky says.

Jennifer Lewke (News10NBC) – I have seen the Governor say, “we’ll make it right, we’ll make them whole,”–You don’t trust that? 

Mark Malahosky – No. No because they’ve had three years to demonstrate how they’re going to make us whole and here we are a week away and they still haven’t been able to say how they’re going to make us whole. 

Rich Fowler could be impacted by the changes to 340B in a couple of different ways, “I’m a patient as well as an employee so, I’m at risk on either side.  Because many of the services we provide are not funded, it’s 340B revenue that covers the expense of those which might be part of my salary,” he explains.  But Fowler worries more about the patients he works with that’s why he continues to hope that something changes with the state’s plan, “Did I think I would be sitting here having these conversations with my history?  Yes, I did because we do have to fight for what we need,” he tells News10NBC.

A compromise bill has been introduced in Albany that would allow the federally qualified healthcare centers to keep most of the money they normally get through 340B but also allow the state to get bigger drug rebates and better prices.  It has a lot of bipartisan support in both the Assembly and the Senate, including all of the members who represent the Rochester region. 

Trillium is planning a rally to urge the Governor’s office to reconsider implementation of the changes.  It’s on Tuesday, March 28 at 12:30 p.m. at 259 Monroe Avenue in Rochester.