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Hospitals are abusing this drug discount program

Congress must step in to help low-income patients

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Hospital chains are unfairly profiting off a program meant to help low-income patients afford their medicines. If policymakers don’t reform this system soon, I worry that many of the marginalized patients I’ve devoted my career to protecting won’t be able to access the care they need.

The program, known as 340B, gives drug discounts to hospitals in underprivileged areas so that they can better serve their communities. Yet, with little oversight, the hospitals can divert the savings to their own bottom lines.

A recent report from the Drug Channels Institute exposed just how big the problem is.

The analysis found that under 340B, hospitals took discounts worth $52.3 billion in 2022 with scant evidence that those savings went to help low-income patients. The report also found that the 340B program continued its exponential growth during the pandemic, swelling by 22% between 2021 to 2022. 

In short, money intended to help marginalized communities is instead being funneled into hospital profits in ever-greater amounts. Having spent much of my career helping Black men with HIV, I find this gravely concerning. But the impact of the exploitation extends far beyond my own work, to all communities grappling with chronic disease and unaffordable health care. The solution is for Congress to bring some much-needed oversight and regulation to the 340B program. 

It all started three decades ago when lawmakers launched a seemingly benevolent plan: In order to help non-profit “safety net” hospitals in poor communities, 340B required pharmaceutical companies to sell them drugs at big discounts. The idea was that this would lower drug prices for low-income patients and also help the hospitals, so that they could reinvest in facilities, equipment, and staff to serve disadvantaged patients. 

Unfortunately, the 1992 law failed to codify any rules about what hospitals should do with the savings, so no proof of reinvestment is required. Soon enough, even hospitals serving prosperous communities realized they could use the law’s loopholes to turn 340B into a profit center. 

Many hospitals have multiple locations. Under current regulations, a hospital can use its facility in an underserved community to qualify for the 340B Program, take millions of dollars in drug discounts, then resell the drugs in more affluent neighborhoods. 

Consider the Cleveland Clinic, known as one of the best hospitals in the country. It uses satellite “rural referral centers” to qualify for discounted drugs under 340B, then sells them at full price through its Cleveland-based flagship hospital. 

The profit from such maneuvers can be substantial. For instance, 340B hospitals sell top oncology drugs at a median of 4.9 times their discounted price, according to a report from the Community Oncology Alliance.

It’s no wonder that 44% of U.S. hospitals now report that the 340B program is a substantial revenue source. It may have also contributed to industry consolidation in recent years, encouraging hospitals to merge in order to acquire qualifying facilities.  

Despite the program’s rapid expansion, there’s little evidence that it’s benefiting marginalized patients. A study in the New England Journal of Medicine found that the “financial gains for hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients.” Another study, in the journal Health Services Research, concluded that when new hospitals join 340B, it doesn’t lead to any change in the amount of uncompensated care they provide. 

In fact, 340B may actually increase healthcare costs for low-income patients. Because hospitals benefit from the difference between the discounted drug price and the sale price, they are incentivized to prescribe more expensive drugs, which yield higher profit margins than lower-cost generic alternatives.

This appears to be happening with the PrEP drugs that prevent transmission of HIV. A report from the American Action Forum, a think tank, found that 340B likely incentivizes hospitals to prescribe more expensive brand-name PrEP over generic versions. This means some patients are paying more than they should for this lifesaving medicine. 

Hospitals chains’ continued abuse of 340B also takes critical resources away from the healthcare facilities the program is meant to help. For instance, Ryan White HIV/AIDS providers help low-income people living with HIV access medications and support services. But letting hospitals exploit loopholes in 340B could leave fewer discounted drugs for Ryan White and similar safety net programs.

Congress needs to reform the bloated and unaccountable 340B program as soon as possible. Democrats and Republicans should be able to agree that eligibility standards must be tightened and reporting requirements improved. Hospitals must use 340B profits to help our most vulnerable patients.

Guy Anthony is president and CEO of Black, Gifted & Whole.

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Proposed Medicaid rule may hurt people with HIV

A freeze on drug development would be a crushing blow

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We’re fortunate to exist in a world where it’s possible to live for a long time with HIV. Medical science has made astounding progress since the 1980s, when a positive diagnosis was considered a death sentence. Queer activism helped bring about the shifts in policy and attitude that made this success possible.

But our job isn’t over yet.

HIV isn’t spread evenly across the United States. In urban areas with high poverty, it’s as prevalent as it is in low-income countries with generalized HIV epidemics, like Ethiopia and Burundi. This means that almost 40% of Americans with HIV get their health coverage through Medicaid, the government insurance plan for low-income people. And recently proposed changes to the program could halt future progress toward finding a cure.

Under the current Medicaid Drug Rebate Program, Medicaid receives a sizeable manufacturer rebate on brand-name drugs ā€” calculated in part based on either 23.1% off the average price of the drug, or the best price available to another purchaser if that discount is higher.

But now, the Centers for Medicare & Medicaid Services (CMS), the federal agency that runs Medicaid, has proposed a new rule. It would require calculating a medicine’s best price by stacking the rebates and discounts on a single unit of drug that a manufacturer provides to different eligible purchasers.

Due to the interplay with other recent changes to Medicaid, in some cases, the total markdown could exceed 100% of the average price of the drug ā€” meaning manufacturers would be forced to effectively sell the medications at a loss to Medicaid.

This could mean trouble for drugs whose largest market is Medicaid, like those that treat HIV. If manufacturers and their investors decide that it’s no longer financially viable to make drugs that primarily serve disadvantaged patients, then those medications might not be developed at all.

That’s concerning, given that many groundbreaking HIV therapies stemmed from private sector research and development. And with research inching ever closer to a cure, a freeze on HIV drug development would be a crushing blow to those of us living with the disease.

The proposed rule change also threatens the search for a cure with policies that target cell and gene therapies, areas in which scientists have recently made promising HIV-related breakthroughs. When cell and gene therapies come to market after years of research, they can often have high up-front costs ā€” sometimes more than $1 million per patient. That’s in part because the field is so cutting edge and the therapies deliver long-term benefits, and in part because research failures in drug development are far more common than successes.

One CMS policy change would require manufacturers to report their research and development costs for specific high-price medicines to the agency. The government could make such information public, and use it to challenge drug prices. In addition, the rule proposed to specifically target accelerated approval drugs, a pathway that has allowed many patients with HIV/AIDS early access to lifesaving treatments.

The problem is that for every drug candidate in clinical trials that succeeds, nine fail. Sometimes they fail after years of research and hundreds of millions of dollars invested. To keep  the research money flowing, that one success needs to make up for the cost of the nine that washed out.

If Medicaid drives drug mandatory rebates so low that companies can’t recoup their investments, it will discourage them from pursuing the most cutting-edge avenues of research ā€” and put some of them out of business. Biotech investors will abandon gene therapy and seek out more stable markets, and HIV research will suffer. Ultimately, patients living with HIV who rely on Medicaid will miss out on potential cures that never get developed. They may also lack access to therapies that do get created, given that the companies behind them could pull out of the Medicaid market altogether.

Forty percent of Americans living with HIV are Black, and 63% are gay and bisexual men.

As a queer Black man with HIV myself, I know all too well how devastating it is to receive that diagnosis, especially when you’re underinsured and living in poverty. But I also know that effective treatment can vastly improve quality of life. Without the sacrifices and the activism of those who came before us, HIV might still be a death sentence.

It’s up to us to continue the fight now. Our community deserves a shot at a cure. CMS officials urgently need to reverse course on this disastrous proposal. And if they fail to do so, it’s incumbent on HIV activists to push for the federal government to adopt policies that support affordable HIV treatments and research funding.

Guy Anthony is the president and CEO of Black, Gifted & Whole.

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BookMen DC: Still going strong at 25

Celebrating the longest-running LGBTQ literary group in the area

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On May 11, 1999, what was originally known as the Potomac Gay Menā€™s Book Group convened for its first meeting. A lot has changed over the ensuing quarter-century, starting with our name. But our identity remains true to the description on our blog: ā€œan informal group of men who are interested in gay literature (both fiction and non-fiction).ā€

Our founder, Bill Malone, worked at the Whitman-Walker Clinic and started the group using donations of remainder books from a wholesaler in New York. Soon after that, members decided to get their own books, and began purchasing them through Lambda Rising, which offered a discount for such orders until it closed in 2010. The group later renamed itself BoysnBooks, and then became BookMen DC in 2007, which is also when we started our blog

Following Billā€™s tenure, Tom Wischer, Greg Farber and Tim Walton (who set up our blog) have served as our facilitators. I succeeded Tim in that role in 2009, and am grateful to him and all my predecessors for laying such a solid foundation for our group. 

Twenty-five years after our founding, we are the longest-running LGBTQ literary group in the DMV. So far, we have discussed nearly 400 books, ranging from classics like Platoā€™s Symposium to graphic novels, gay history and memoirs, and novels by James Baldwin, Michael Cunningham, E.M. Forster and Edmund Whiteā€”to name just a few of the many authors and genres weā€™ve explored.

Currently, we have more than 120 names on our mailing list, of whom about a quarter attend meetings at least occasionally. (Average attendance at our meetings is about 10.) Our members variously consider themselves gay, queer, bisexual, or transgender, and those varying perspectives enhance our discussions. I would be remiss if I didnā€™t acknowledge that, like many LGBTQ organizations, we are not nearly as diverse as I wish we were. Although we do have young members and people of color within our ranks, we are predominantly white and middle-aged or older. We have tried various forms of outreach to further diversify our membership, and will keep working on that.

How has BookMen DC not just survived, but thrived, when so many other book clubs and LGBTQ groups have foundered? I would identify several factors.

First and foremost, we are welcoming. We have no minimum attendance requirements and charge no dues. And we expressly encourage members to join us at meetings even if they havenā€™t finished the selection weā€™re discussing.

We are also collaborative. Each fall, members nominate titles for the next yearā€™s reading list; I then compile those suggestions into a list for members to weigh in on, and the results of that vote determine what we will read. 

Finally, we are flexible and adaptable. Over the years, we have met in locations all over the District. Currently, we meet on the first Wednesday of each month at the Cleveland Park Library (3310 Connecticut Ave. NW) from 6:30-7:30 p.m. to discuss entire books; afterward, those interested go to dinner at a neighborhood restaurant.

When the pandemic struck four years ago, we took a break for a couple of months before moving operations online. (Thank God for Zoom!) Even after the venues where weā€™d been meeting reopened, we have continued to meet virtually on the third Wednesday of each month, from 7-8 p.m. During those Zoom sessions, we discuss sections of anthologies of poetry and short stories, as well as short standalone works (e.g.,  plays and novellas).

If you enjoy LGBTQ literature and would like to try us out, visit our blog: https://bookmendc.blogspot.com/ and click the link to email me. Weā€™d love to meet you!

Steven Alan Honley, a semi-retired musician, editor, and writer, has been a member of BookMen DC since 2000 and its facilitator since 2009.

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Opinions

Rosenstein: Vote for Angela Alsobrooks and April McClain-Delaney

Two strong, accomplished women for Maryland

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I am endorsing two strong accomplished women for Maryland. The first is Angela Alsobrooks, for United States Senate. Second is April McClain-Delaney for Congress in Marylandā€™s 6th District. Both women are superbly qualified, and will fight hard for, and be a credit to, the people of Maryland.

Angela Alsobrooks is county executive of Prince Georgeā€™s County. She was born and raised in Maryland. She is a graduate of Duke University, and the University of Maryland, School of Law. She was the first full-time Assistant Stateā€™s Attorney to handle domestic violence cases in Prince Georgeā€™s County. She made history as the youngest, and first woman, to be elected Prince Georgeā€™s County Stateā€™s Attorney where she stood up for families, taking on some of Marylandā€™s worst criminals, while treating victims and the accused with dignity and respect. Under her tenure, violent crime dropped by 50 percent.  

Alsobrooks has said, ā€œThis year we know the rights of women to control their own bodies and healthcare, is at the top of the list of concerns for so many Marylanders, and decent people across the country, both men and women.ā€ Because of this Maryland must elect a strong woman to ensure we win the fight on this issue. There are many reasons to support Alsobrooks. One is if we look at the United States Senate, what is clearly missing, is an African-American woman. That is a disgrace. Marylanders have the ability to make that right by voting for Angela Alsobrooks. 

But there are other reasons to vote for Angela. She understands how federal policy impacts states and counties, directly impacting her constituents, because she has dealt with the issues that arise from the bills Congress passes. Angela is a pragmatic progressive, and will work across the aisle to get things done. Nothing prepares you more for negotiating with Republicans in Congress, than negotiating with a county council and community activists, and she has done both successfully for many years. She will continue to fight for LGBTQ equality having named the first LGBTQ liaison in PG County. She supports legislation to fight climate change, and supports student loan forgiveness. Maryland leaders know Alsobrooks is the right candidate. She has been endorsed by Gov. Wes Moore, Lt. Gov. Aruna Miller, Sen. Chris Van Hollen and former Sen. Barbara Mikulski, Congressmen Jaimie Raskin, Steny Hoyer and Glenn Ivey; and an overwhelming number of local legislators and leaders in PG County. They all know how good she is, and how much she will do for Maryland, and the nation. I urge a vote for Angela Alsobrooks in the Democratic Senate primary.

I also join a hero of mine, former Speaker Nancy Pelosi, Congressmen Steny Hoyer and Dutch Ruppersberger, along with a host of Maryland legislators and office holders, who have endorsed April McClain-Delaney. She has more than 30 yearsā€™ experience in communications law, regulatory affairs, and advocacy, across a broad spectrum of government, private sector, and non-profit engagements. She has served as the Washington director and a board member of Common-Sense Media, a leading non-profit dedicated to how media impacts kids health and wellbeing. Her policy and advocacy efforts have spanned digital citizenship, bridging the digital divide, and tech equity issues, privacy matters, spectrum, and internet governance. She has served as assistant general counsel and regulatory affairs director at Orion Satellite where she oversaw domestic and international regulatory efforts in approximately 20 countries, and served as one the founding board members of the International Satellite Association.

In addition to her professional endeavors, she has served on numerous boards and councils. These include the Meridian Womenā€™s Leadership Council; Georgetown Institute for Women, Peace and Security; Georgetown Law Center (past chair); Northwestern University Board of Trustees; the International Center for Research on Women; Innocents at Risk; and the Sun Valley Community School. She is a graduate of Northwestern University and has her JD from Georgetown Law Center.  Delaney is the best candidate to win the 6th District for Democrats. Delaney understands rural Maryland having grown up on a farm in Iowa. She understands government today, serving as the Deputy Assistant Secretary for Communications and Information, U.S. Department of Commerce, in the Biden administration. 

When it comes to the issue of protecting a womanā€™s right to control her own body and healthcare, no one will match April in her vigilance. She is a mother fighting for the rights for her four daughters. She is a strong supporter of LGBTQ rights, and will support policies to fight climate change, support debt relief for students, and will work to protect our national security. She understands what it means to work across the aisle without giving up any of her principles. She is the kind of person we need in Congress. I urge a vote for April McClain-Delaney in Marylandā€™s 6th Congressional District, Democratic primary.Ā 

Peter Rosenstein is a longtime LGBTQ rights and Democratic Party activist. He writes regularly for the Blade.

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