Big pharma sues Arkansas over low-cost prescription program, community health centers join the fray
A drug company lobby group is suing Arkansas because they say a new state law takes advantage of a 30-year-old program that helps uninsured and underinsured people get the drugs they need. they need. And on Monday, a network of community health centers stepped in as intervenors in the federal lawsuit to help push back.
The Pharmaceutical Research and Manufacturers of America group, known as “PhRMA,” sued Arkansas in September after Bill 1103 went into effect. Arkansas’ new law works with a federal program known as 340b’s name, which requires drug companies to provide the rebates as a condition of participating in the lucrative Medicare and Medicaid markets.
A bipartisan team including Rep. Michelle Gray (R-Melbourne), Rep. Jeff Wardlaw (R-Hermitage), Rep. Reginald Murdock (D-Marianna), Rep. Vivian Flowers (D-Pine Bluff) and Senator Jason Rapert (R-Conway) came together to sponsor the bill, which also won support from the Arkansas Hospital Association and the Arkansas Pharmacists Association.
But the Pharmaceutical Research and Manufacturers of America group says the decades-old 340b program has exceeded its original limitations and is subject to abuse. “PhRMA members believe that for-profit pharmacy interests (and others) have found illegal ways to leverage 340B rebates to their financial advantage, often without helping the vulnerable patient populations that the 340B program was. supposed to help,” they said in court documents. . Arkansas Insurance Commissioner Alan McClain and Arkansas Attorney General Leslie Rutledge are designated as defendants.
Arkansas Community Health Centers, which represent nonprofit facilities that bring health services to rural and otherwise underserved areas of the state, want a piece of the action. On Monday, the group made a formal request to intervene in the trial. CEO of Arkansas Community Health Centers Dr. Lanita S. White said the legal challenge in court could mean higher prices for patients who cannot afford them and less funding for community health centers.
“Manufacturers are literally making profits off the backs of our most vulnerable and financially burdened patients. Their actions make it much more difficult to keep our clinics open. And, they’re doing this in the middle of a pandemic, which is just awful,” she said.
Here is the full statement from Arkansas Community Health Centers:
Arkansas Community Health Centers today filed a request to intervene in a federal lawsuit with significant implications for health care providers across the state and for patients who cannot afford to buy life-saving drugs. It has become a test case nationwide.
Starting in the summer of 2020, pharmaceutical manufacturers placed several conditions on a drug rebate program called 340B. These restrictions make it more difficult for uninsured or underinsured people to obtain essential medicines to ensure their quality of life.
Additionally, the restrictions have cut at least $1 million a year from the budgets of community health centers across the state, money used to run medical programs that benefit at-risk and rural Arkansans.
“Manufacturers are literally making profits off the backs of our most vulnerable and financially burdened patients. Their actions make it much more difficult to keep our clinics open. And, they’re doing this in the middle of a pandemic, which is just awful,” said Dr. Lanita S. White, CEO of CHCA.
Responding to the manufacturers’ actions, the Legislature overwhelmingly passed and Governor Asa Hutchinson signed Bill 1103 of 2021 into law. The CHCA, Arkansas Pharmacists Association, and Arkansas Hospital Association have each supported the legislation.
Most notably, Law 1103 requires manufacturers to honor $340 billion rebates on prescriptions dispensed at community pharmacies. Most CHCs do not have an in-house pharmacy. They rely heavily on contract pharmacies to meet the healthcare needs of their patients.
Law 1103 places the Arkansas Department of Insurance in charge of enforcement.
But the pharmaceutical industry continues to force some patients to use only one pharmacy that may be dozens of miles away, limiting patient access and choice. Some patients have to switch medications or face the possibility of going without.
On September 29, 2021, in the U.S. District Court in Little Rock, Pharmaceutical Research and Manufacturers of America (PhRMA) filed suit against the Department of Insurance and Attorney General Leslie Rutledge in her official capacity. PhRMA seeks to remove the section of law 1103 relating to contract pharmacies. PhRMA alleges that the state has no right to regulate the 340B drug program.
The CHCA argues that the case law makes it clear that states can help ensure that programs approved by Congress are followed.
“PhRMA wants to circumvent the will of the Arkansas Legislature and Governor. The Arkansans deserve better,” said William von Oehsen of Powers Pyles Sutter & Verville of Washington, who is representing CHCA in the case. Steel Wright Gray of Little Rock is the local attorney.
The CHCA is asking U.S. District Judge Billy Roy Wilson to grant a request to intervene. Piggott Community Hospital, a critical access hospital that depends on contract pharmacies to serve its patients, joins CHCA in the application. The hospital is also represented by the firms Powers and Steel.
Intervention in the case will allow parties directly affected by the 340B restrictions, such as CHCs, to more fully present their case to the court.
Lawsuits in several other states over 340B restrictions by manufacturers are also underway. No other state has passed a law as strong as Arkansas Law 1103, but several other states are looking to follow Arkansas’ lead. CHCs across the country have shown keen interest in the Arkansas case.
Notably, 340B rebates are not funded by the government or taxpayers. Congress established 340B as a requirement for the pharmaceutical industry to participate in the Medicaid and Medicare program. In return for participating in this lucrative marketplace, they offer rebates through 340B.
The federal Department of Health and Human Services has taken the position that the actions of drug manufacturers are illegal and that contract pharmacy rebates must be honored.