Manufacturer revises pharmacy reimbursements for free HIV drugs

Michigan reviewing changes to determine possible impact

By: - July 15, 2021 5:50 pm

Cliff Sanchez (R), a phlebotomist with the Chicago Recovery Alliance (CRA), tests an intravenous drug user for HIV antibodies inside one of the organization’s outreach vans May 10, 2006 in Cicero, Illinois. | Scott Olson/Getty Images

A California pharmaceutical company that produces HIV prevention and treatment drugs says it is changing its reimbursement structure for pharmacies that dispense its medicine for free to uninsured people. 

The Michigan Advance removed a July 12 story from publication because it incorrectly reported that Gilead Sciences of California, maker of the drugs Truvada and Descovy, is withdrawing its participation in the federal 340B program. The program allows pharmacies contracted with community health care centers and clinics that serve uninsured and low-income patients to receive drugs at significantly lower prices than wholesale, while commercial insurance, Medicaid and Medicare patients pay full retail price for the drugs when they are prescribed. The difference between the traditional wholesale price and the 340B cost is called a “savings.”

The 340B savings are then earmarked for use related to patients within those clinics and, in the case of HIV medications, for HIV-specific costs. Clinics have used this money to hire peer navigators, community health workers, and assist in paying for medications for the uninsured among other programmatic expenses. 

Gilead, which announced the change to reimbursements in April, said it will continue to provide free medicine to uninsured people through its Advancing Access Patient Assistance/Medication Assistance Program (PAP/MAP). 

It “requires Gilead to reimburse a pharmacy for dispensing a bottle that is already in its inventory,’’ spokesperson Maria Favorito wrote to the Advance in an email. “In this way, pharmacies dispense free drug to qualifying individuals in need and bear no cost for themselves for doing so.’’

The reimbursement adjustments were necessary to sustain the company’s free medicine program, Favorito said. 

“We recently found that certain organizations were acquiring a bottle of Gilead medication at the heavily discounted (340B) price and then obtaining reimbursement from Gilead at the full wholesale acquisition (‘list’) cost when the drug was dispensed through our PAP/MAP program,’’ Favorito said. “This is not intended, nor is it a sustainable model for a free drug program.’’

But the change has drawn concerns from organizations that use the 340B savings to provide care to vulnerable populations. Kaiser Health News reported that advocates say that money pays for doctors visits and lab tests and would result in fewer dollars for those services.

Lynn Sutfin, a spokesperson for the Michigan Department of Health and Human Services (DHHS), told the Advance in an email Thursday that the department is still reviewing Gilead’s reimbursement change.

“At this time, we do not have enough information to determine the impact of these changes. This will not take effect until Jan. 1, 2022, so we are working to gather additional information,” Sutfin said.

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Michigan Advance
Michigan Advance

The Michigan Advance is a nonprofit newsroom covering Michigan politics and policy.

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