Maricruz Salgado was getting his diabetes under control. She pays less than $75 for all five diabetes medications every three months, thanks to a federal program that allows clinics serving the poor to buy drugs at deep discounts. is completed.
But in July, the prices of three of these drugs soared. Without health insurance, Salgado suddenly found herself facing costs of hundreds of dollars a month. She couldn't afford it.
Her doctor switched her to a cheaper drug. Within a few days of taking one of them, she says she experienced a dizziness attack so severe that she could barely keep up with her hectic daily schedule as a phlebotomist and home caregiver. By the time she returned to the doctor in September, her blood sugar levels had risen.
“We were in a good place,” said Dr. Wesley Gibert, who treats Salgado at Erie Family Health Center, a network of clinics in Chicago that serves patients regardless of their ability to pay. . “Then I had to change all my medications.”
The clinic's price increases are indicative of a complex web of federal policies regulating drug prices. In 2024, drug companies could lower the list prices of dozens of common drugs to avoid huge fines imposed by the American Rescue Plan, the coronavirus relief package passed three years ago. Ta. But the changes backfired on low-income people like Salgado.
The decision to make these drugs more affordable for many patients quietly raises other problems. It's a severe financial blow to the clinics tasked by the federal government with caring for the nation's poorest people. These nonprofit clinics operate in every state and serve nearly 32.5 million people, about 10% of the country's population.
“This is the law of unintended consequences,” said Beth Powell, pharmacy director at The Centers, which operates five community clinics in the Cleveland area. Powell said that while many consumers benefited from companies' price-cutting decisions, “the public did not.”
More than 1,000 community clinics across the country rely on a decades-old federal program that requires drug companies to offer deep discounts.
Under the so-called 340B program, companies typically sell their brand-name drugs to clinics at a discount of 23% or more off list price. The same discount system applies to state Medicaid plans. But if companies raise the list price of a drug above the rate of inflation, they will be penalized and forced to offer even deeper discounts to clinics.
For years, this meant that every time a company raised a drug's list price above the rate of inflation, it reduced the amount local clinics would pay. Many drugs, including insulin, have become virtually free.
But the American Rescue Plan made significant changes, imposing even greater penalties on drug companies for raising prices. In January 2024, companies that continue to raise drug prices will have to pay state Medicaid plans every time those drugs are used, potentially costing the industry billions of dollars. be.
“It was a bridge too far” for companies, said Antonio Ciaccia, a drug pricing researcher who advises state governments and employers.
Manufacturers reduced the prices of at least 77 drugs in 2023 and 2024, according to an analysis by Ciaccia's nonprofit group. The list also includes widely used asthma medications such as Advair and Symbicort, as well as diabetes medications such as Victoza, which Salgado was using before the change.
When drug companies lowered their list prices, the inflation penalty disappeared. This means local clinics now have to pay more than a 23% discount off the regular list price. This is far more than every penny you were paying before.
“Unfortunately, the complexities of the U.S. health care system can reduce access and affordability for many people,” Jamie Bennett, a spokesperson for Novo Nordisk, which makes Victoza, said in a statement. said. “Very often when we lower prices, people don't receive the savings, and that's a problem.” He added that the company also has patient assistance programs in place to make its products more affordable. He said there was.
David Bowman, a spokesman for the Health Resources and Services Administration, which oversees 340B discounts, did not respond to questions about how local clinics were affected by the drug price cuts. He said other recent policies, such as directing Medicare to negotiate drug prices, have lowered drug costs for low-income patients.
Clinics were hit by the change last July, as there was a six-month delay in how the 340B discount worked. Some clinics have begun calling patients before their prescriptions expire and offering to change them to cheaper drugs, even though they may have more severe side effects. Ta. Some companies decided to tap into already low reserves to cover higher out-of-pocket costs.
Salgado said she received a call from Erie's nurse over the summer telling her about the price change. Until then, she had been paying about $15 for a three-month supply of Victoza, which she injects daily to lower her blood sugar levels. Since July, the cost has risen to more than $300.
After a few weeks, Salgado got used to his replacement, Byetta, and his dizziness subsided. However, the drug must be injected twice a day instead of once. And Salgado now has to use a special pharmacy 20 minutes from her home to qualify for federal discounts on the two insulin drugs she's switching to, which companies charge to clinics. This is the result of increasingly strict regulations.
Salgado, 39, said she wants to avoid the fate of her mother, who died at age 54 from complications from diabetes. However, it is difficult to visit the pharmacy frequently and keep changing medications. “Sometimes you reach a point where you just don't want to do this anymore,” she says.
This change also makes it difficult for community clinics to provide other services.
In the 340B program, clinics purchase discounted medications on behalf of patients. If these patients have insurance, the clinic can bill the insurance company the normal higher rate and pocket the difference. But now that spread, or the difference between the price of a drug and the amount covered by insurance, has narrowed. As a result, clinics have less money to spend on services that are not covered by government subsidies or insurance, such as helping patients find housing.
At Valley View Health Center, a network of clinics serving patients in rural Washington, $340 billion once funded a mental health program that employed eight therapists. In September, the clinic canceled the program and laid off therapists.
“This was such a sudden change for us that it definitely impacted our ability to care for our patients the way we needed to,” said Gaylon Spreadley, the clinic's chief executive officer. spoke.
Some patients who experience increased costs may qualify for patient assistance programs offered by drug companies. So did Lorena Sarmiento, another Erie Health patient who uses the Lantus insulin pen. Last fall, she was offered $490 at the pharmacy after the 340 billion yen discount was changed. This is the retail price for one box of insulin pens. Erie Health referred her to another pharmacy, which allowed her to sign up for a manufacturer's coupon, lowering her cost to $35 a month.
Doctors and pharmacists at some clinics said these drug company assistance programs are hit or miss. In some cases, it may be for a limited time or require patients to reapply periodically. Patients often must be legal residents of the United States or have a fixed address.
“It's a long process and there's a lot of hoops to jump through,” said Michael Lin, director of pharmacy operations at Family Health Center in Louisville, Kentucky.
Sarmiento and her husband, Luis, spend about $500 a month on medical needs such as special diets, medications and blood sugar monitors. Although we no longer face the highest prices for insulin, the cost remains 10 times what it was just a few months ago when we spent about $10 for three months' worth of insulin.
Sarmiento said he tries not to complain. “You always have to look on the positive side,” he said. “But lately it has become difficult.”
