The Texas County Memorial Hospital board of trustees last week heard a presentation about a pharmacy network that could have a major impact on pharmaceutical costs for some in the area.
David Pointer of Pointer Law Firm has been working with TCMH since last year to bring the 340B pharmacy program to TCMH patients.
Pointer is one of four attorneys in three Pointer Law Offices in south central Missouri. He and members of his firm assisted Ozarks Medical Center in West Plains in setting up the 340B contract pharmacy network for the hospital and its clinics. In addition to providing the legal expertise for the pharmacy contracts, Pointer has established an independent consulting firm that assists hospitals in setting up the 340B program.
Pointer explained that the 340B contract pharmacy network was established in the 1990s by the federal government to provide deep discounts on pharmaceuticals to hospitals that were serving poor populations. Eligible hospitals were able to buy pharmaceutical products at a special 340B price and pass this pricing along to any uninsured outpatients.
“Many patients leave the hospital’s emergency room or clinic with a prescription that is 340B eligible, but they are not able to take advantage of a discount because there are no contracts in place,” Pointer explained.
Hospitals that are eligible to participate in the 340B contract pharmacy network must be “DSH eligible,” meaning that they see a higher number of uninsured and low-income patients than other hospitals. TCMH is DSH eligible.
Pointer explained that hospitals did not participate in the program because they were allowed to contract with only one pharmacy. The Accountable Care Act changed the 340B program, allowing hospitals to contract with multiple pharmacies.
According to Pointer, many DSH eligible hospitals are beginning to utilize the 340B contract pharmacy network for their patients. “I have seen this program work,” Pointer said, predicting that within a short time he believes that most DSH eligible hospitals in Missouri will use the program.
The 340B contract pharmacy network will allow TCMH to purchase pharmaceutical products from the manufacturers at an average of 58 percent below regular wholesale pricing. TCMH would then distribute these pharmacy products to pharmacies that are under contract with TCMH. The pharmacies dispense these products on behalf of TCMH, and TCMH pays the pharmacies a fee to dispense the products.
A third party administrator oversees the program, and TCMH contracts with the third party administrator.
“The 340B program provides financial support for hospitals that are seeing reimbursements cut in other areas,” Pointer said, “and this program makes a huge difference for patients without insurance.”
Pointer provided several examples of pharmaceutical costs. A Nasacort-brand inhaler costs approximately $110 for uninsured patients. For a patient with a prescription from a TCMH healthcare provider, using a pharmacy that TCMH contracts with through the 340B network, the same Nasacort inhaler would cost $1 plus a small dispensing fee.
“Physicians want to be able to help their patients find drugs that they can use and afford,” Pointer explained. “We will provide information showing pharmaceutical pricing that each physician will have when providing prescriptions for their patients.”
TCMH administration has been working with Pointer and talking with other hospitals in the 340B program since early last year.
“David understands the dynamics of the area, and he sees the advantages to local pharmacies,” said Wes Murray, chief executive officer at TCMH.
Pointer shared the story of a patient that was paying more than $800 monthly for diabetes medication. The patient’s physician and regular pharmacy contracted under the 340B program, and the patient’s monthly medication bill dropped to $100 a month.
“Patients are finding about this program and taking advantage of it by using healthcare providers and pharmacies that are in the 340B network,” Pointer said.
Patients are required to pay for the pharmaceuticals with cash upon receipt, and Pointer noted that pharmacies in the 340B network have watched their numbers of cash paying customers rise over time.
“This is a great opportunity for our physicians and our area pharmacies to capture patients back that may have migrated out of their local healthcare system,” Murray said. “It could also generate some additional revenue for us.”
Pointer explained that the 340B contract pharmacy network does not require capital outlay or full-time employees. Additionally, the cash comes into the program before the expenses, and the expenses are proportional to the percentage of revenue.
“It’s a very safe business program,” Pointer said.
“Over time, patients learn that they need a TCMH provider to help them get their pharmaceuticals at a lesser cost,” Pointer said. “There’s always a group of patients that the program deeply affects.”
Doretta Todd-Willis, chief nursing officer at TCMH, believes the program will assist patients in maintaining compliance with physician orders.
“Many of our patients would be more compliant if they could afford the prescriptions they need,” she said.
Pointer is working with area pharmacies to set up the 340B contract with TCMH. The hospital hopes to have the program under way with their healthcare providers and area pharmacies by March 1.