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Drug-pricing rule hinders low-income, diverse communities

Personnel at the Sacramento Native American Health Center. (Photo: SNAHC)

Amid the ongoing health crisis, California’s Medi-Cal Rx transition threatens the stability of over 1,300 community health centers that serve more than 7.2 million people throughout the state.

In a noble attempt to discount rising prescription drug prices, a huge gap in savings is created for community health centers. Ironically, the transition disproportionately impacts the very same people it aims to help: California’s diverse population.

In January 2019, Gov. Gavin Newsom signed an Executive Order with the aim of consolidating the state’s drug purchasing program to leverage prescription discounts for Californians, a policy that went into effect on Jan. 1, 2022.

Eliminating these savings would jeopardize patient access to critical support services, disrupt access for patients, and in the long run, raise costs for the CHCs.

There is no question that more must be done to reduce the rising cost of prescription drugs, but one result of the governor’s Executive Order is that it would have the unintended consequence of eliminating the ability of community health centers to reinvest the savings into patient care that are acquired through the 340B Drug Pricing Program under Managed Care.

Pharmacy savings are essential to community health centers’ ability to provide comprehensive, quality care to their communities. Eliminating these savings would jeopardize patient access to critical support services, disrupt access for patients, and in the long run, raise costs for the CHCs.

We know from recent data gathered by the COVID-19 pandemic that marginalized communities are the ones hit hardest by poor health outcomes. They contract illness at higher rates, have less access to medical care, and suffer from increased mortality rates than their white, affluent counterparts.

We agree that we need to resolve the issue of high prescription drug costs, but it shouldn’t be to the determinant of health centers and the funding their patients depend on. It is unfair to endanger the future health of California’s low-income families by gutting the funding mechanism for the very health centers that provide their medical attention.

Currently, one in every three Medi-Cal patients are served by a community health center, and patients across the board rely on critical medical services such as dental, optometric, primary care, pharmacy and behavioral health, which also includes access to health education and transportation services.

The California Primary Care Association (CPCA) conducted a survey demonstrating the impact to CHCs and their patients if 340B savings were lost through the transition. Among them included a statewide reduction in nearly 4,000 appointments, weekly, widespread closures of community health center sites, and loss of funding to help subsidize medications for low-income patients.

The impact of the 340B savings losses are real and dire for Californians. We can’t afford to eliminate care options for families already struggling to recover from the COVID-19 pandemic.

To offset the savings deficit incurred by the Medi-Cal Rx transition, we are calling on the California State Assembly and Assembly Budget Committee to include an additional $50 million from California’s surplus budget for the Non-Hospital Clinic Supplemental Payment Pool. With it, we can continue to prioritize fair access to care for community health center recipients regardless of their ability to pay, and provide vital resources, vaccines and medical attention to the people who need it most.

California has historically led the nation in equity-driven policies that aim to uplift underserved families.

Whether it be access to healthcare, education, or other support services, our state operates on the cutting edge of progressivism. We are a state skilled in problem-solving. The solution to the heightened prescription drug price problem isn’t reducing the capabilities of community health centers to hopefully offset medication costs down the line. It’s allocating additional monies to maintain their operations and discounting rising drug prices.

Effecting real change for low-income Californians means that we prioritize total health, from routine physicals to complex treatment plans and everything in between.

We are counting on our legislators to uphold the same values and prioritize the health of those who rely on us, now more than ever.

Editor’s Note: Britta Guerrero is the CEO of the Sacramento Native American Health Center, and serves as the chair of the board of the California Primary Care Association.

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