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Amending Drug Pricing Program Would Support Continued Response to COVID-19

Expanding the 340B Drug Discount Program to include therapeutics with Emergency Use Authorization would shrink safety net gaps for underinsured and uninsured populations.

Written by Rachel Sauer on November 16, 2022

The halting of funding for two federal programs that provided financial support during the height of the COVID-19 pandemic for underinsured or uninsured populations has created significant gaps in the health care safety net, according to a commentary published Monday in Health Affairs Forefront.

One way to bridge those gaps would be to amend the Health Resources and Services Administration’s 340B Drug Discount Program, allowing discounted purchase of Emergency Use Authorization (EUA) therapeutics.

“Under the 340B Drug Discount Program, federally qualified health centers and public hospitals that provide a disproportionate amount of care to uninsured and underinsured patients are eligible to buy outpatient drugs at significant discounts,” explains Mika Hamer, PhD, MPH, lead author of the commentary and a post-doctoral research fellow in the University of Colorado Center for Bioethics and Humanities. “Currently, outpatient COVID-19 therapeutics are only available under emergency use authorization, so with the end of federal funding, and without amending 340B to include therapeutics with provisional approval, these health centers and hospitals are left with limited options for continued outpatient COVID-19 care.”

Initial response to COVID-19

In response to the initial COVID-19 surge beginning in March 2020, U.S. officials established the Provider Relief Fund, which included allocations for COVID-19 testing, treatment, and vaccination. From this fund, two programs were created to address the needs of underinsured and uninsured populations: the Health Resources and Services Administration’s (HRSA) Uninsured Program, which covered the cost of COVID-19 testing, treatment, and vaccination for uninsured individuals; and the COVID-19 Coverage Assistance Fund, which covered vaccine administration costs for underinsured individuals whose insurance plans required cost sharing.

In early 2022, both programs were halted due to lack of funding, “which has a serious impact on health centers and public hospitals that serve underinsured and uninsured populations,” Hamer says. “Many were in deep financial distress even before the onset of the pandemic, and in many cases that hasn’t improved. Our point of view is that it’s unreasonable to ask these entities to bear the burden of full-cost purchasing of the outpatient COVID-19 therapeutics that are transitioning to the commercial marketplace.”

For example, the monoclonal antibody bebtelovimab, a COVID-19 therapeutic granted EUA by the U.S. Food and Drug Administration (FDA), costs $2,100 per treatment and health care providers must now purchase it directly from the pharmaceutical company. This is not problematic for providers caring for many patients with insurance, which will reimburse the cost of the treatment, Hamer says. However, safety net providers who care for large populations of uninsured and underinsured populations could find themselves falling deeper into the red.

Though the U.S. Department of Health and Human Services announced Sept. 23 that facilities administering bebtelovimab that was previously purchased from the commercial marketplace could receive free replacement doses for underinsured and uninsured patients, the logistics are unclear and place increased burdens on the facilities serving these patients, Hamer says.

A robust response system

A significant step toward closing these new gaps in the COVID-19 safety net would be to amend the 340B program to include EUA therapeutics, Hamer says, which it currently doesn’t.

Originally created in 1992 to offer financial relief to entities that serve the highest-need patient populations, the 340B Drug Discount Program allows eligible providers to buy ambulatory therapeutics at an estimated 35% discount.

“One of the biggest challenges with COVID is the continual mutation of the virus itself,” Hamer says. “As different variants have emerged, we’ve seen therapeutics, particularly monoclonal antibody products that act on the spike protein, be developed for use against the dominant variant, only to become obsolete before reaching the point of full FDA approval. It would be naïve to think SARS-CoV-2 is not going to continue to mutate, so it’s important to have mechanisms in place that allow us to be responsive and provide uninterrupted care to the populations who are disproportionately affected by COVID.”

Amending 340B will not solve all the issues associated with growing gaps in the COVID-19 safety net, Hamer says, but could be an important step to make sure those gaps don’t continue to widen.

“Allowing the purchase of these therapeutics under 340B doesn’t fully alleviate the financial burdens on safety net providers,” Hamer says. “And we’re not asking for the therapeutics to be provided for free – there are research and development costs that need to be accounted for. Our message is that amending 340B offers a turnkey solution, one that safety net providers already use outside of COVID-19. Now is the time to use our policy tools to bolster the safety net system by ensuring uninterrupted care for these patients. At a time when there are still 2,500 people a week dying from this disease, we need enduring solutions.”

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Mika Hamer, PhD