In April, Gilead Sciences announced something that sent many U.S. community health clinics into a panic.
Gilead manufactures several HIV treatment regimens, as well as the brand-name versions of the only two drugs currently approved in the U.S. for PrEP, a.k.a. pre-exposure prophylaxis. When taken as prescribed, PrEP protects HIV-negative people from acquiring the virus.
Starting in 2022, Gilead said, its “Advancing Access” program—which provides free PrEP to patients who aren’t covered any other way—will begin reimbursing such clinics for PrEP prescriptions (or “fills”) at a much lower rate than they previously had. The decrease will mean that such clinics will lose a big windfall that they put toward covering other PrEP expenses for their patients living in poverty, such as the regular visits and labs that come with being on PrEP.
Prism Health, a clinic based in North Texas, told PBS Newshour that they stood to lose $2 to $3 million annually. (To put things in some perspective, Gilead said that it earned $24.4 billion in total sales in 2020.)
The reason for the loss is complicated, though the main reason is that such clinics participate in a government program called 340B-—we’ve written about it before—that makes drug wholesalers or middlemen charge community clinics for fills at a steeply discounted rate from the drug’s retail price. In the instance of Gilead’s charity program, Gilead was then reimbursing clinics for its PrEP drugs, Truvada (emtricitabine/tenofovir disoproxil fumarate) and Descovy (emtricitabine/tenofovir alafenamide) at the full retail price of roughly $1,600 per bottle plus extra money for administrative expenses, or approximately $1,900 per fill. Under 340B, clinics may have been paying wholesalers as little as $450 per fill, so they were taking in potentially as much as $1,500 per fill for their own purposes.
Without such extra money from Gilead, “none of these people would be in care with us,” John Carlo, M.D., the executive director of Prism Health, told Newshour—because, he explained, the extra money goes toward patients’ visits and labs.
According to Newshour, Gilead claims that they (somehow) did not know that they were overpaying clinics. Gilead’s decision to cut back the payments may have coincided with their discovery that several Florida clinics and pharmacies were allegedly misusing the charity program, recruiting low-income people who did not actually need or want PrEP, then writing them fills so that they could cash in on the Gilead overpays. (The drugmaker has sued those parties.)
Certainly, the impending Gilead cutback creates a shortfall for many clinics who have done nothing shady—and, in the Newshour story, the drugmaker did take pains to say that, even if the overpay was an oversight, it was never their intention to fund PrEP-related needs beyond the pill itself. TheBody reached out to the Centers for Disease Control’s (CDC) HIV Prevention division, now run by former New York City deputy health commissioner and passionate PrEP advocate Demetre Daskalakis, M.D., M.P.H., asking if the agency might help make up that shortfall in some way.
A CDC rep replied via email, noting that the agency does not purchase drugs directly as part of its prevention programs—but then wrote: “We are, however, working on multiple fronts to ensure PrEP access by providing support to state and local health departments and other partners to scale up PrEP, including targeted funding to help deliver PrEP to those who need it most. Additionally, CDC supports Ready, Set, PrEP, the HHS [Department of Health and Human Services] program that provides PrEP medications available at no cost to individuals who qualify and lack prescription drug coverage.”
The rep also wrote: “CDC is always working to increase access to pre-exposure prophylaxis (PrEP) and related wraparound services through its own funding streams, including by recently adding flexibility to [Ending the Epidemic in the U.S. (EHE) https://www.cdc.gov/endhiv/] funding requirements that allow communities to provide wraparound services, including services related to PrEP, using EHE funds. We will continue looking for ways to expand access to these services.”
A Larger Problem Looms for U.S. PrEP Access
Beyond the Gilead reimbursement cutbacks, however, a larger issue is looming with PrEP access and adherence. Access remains higher among white gay men than among Black gay men—meanwhile, Black gay men and Black transgender women still have the highest HIV rates in the United States.
Earlier this year, the key ingredients in PrEP went fully generic, flooding the market with versions retailing for as little as $1 a pill. As is the case with all meds, large U.S. health plans like United Healthcare increasingly prefer covering these generics to Gilead’s pricey brand-name Truvada and Descovy, which means that doctors will now likely have to jump through hoops to get patients on one of the brand names. Access to brand names such as Descovy is important for patients with pre-existing kidney or bone issues because some evidence suggests that they are safer for them than current generic PrEP formulations.
With the advent of generic PrEP, Gilead’s charity program may soon be going the way of the dinosaur anyway. Luckily, the large percentage of the population covered by private insurance, Obamacare, Medicaid, or Medicare can now easily get their generic PrEP covered.
Yet, unfortunately, folks who’ve been getting their PrEP via Gilead charity for lack of any other coverage may be left out in the cold if Gilead’s payment cutbacks mean they can no longer get their PrEP-related visits and labs covered. (In the Newshour story, the head of a network of clinics in Tennessee said those visits and labs cost roughly $2,000 annually per patient.)
Such folks are often among the 4 million people in 12 states—mostly in the Southeast, including Texas—that have refused to expand Medicaid coverage to include not just the extreme poor but the average poor. These folks, often of color, aren’t poor enough for their state’s stingy Medicaid programs but aren’t “rich enough” to afford Obamacare, which can cost hundreds of dollars a month even if one is receiving government subsidies.
So when it comes to closing racial and other gaps in PrEP coverage, this is the bigger problem, says Kenyon Farrow of the advocacy group PrEP4All (and, full disclosure, a former senior editor of TheBodyPro).
“Up to this point,” he says, “there was a perverse incentive for drug prices to be high,” because 340B and drugmaker charity programs like Gilead ensured a high retail payback rate to clinics that they could use to fund visits and labs for the uninsured.
“But now,” he says, “we have low-priced generics in the HIV meds market for the first time, so we’ve reached a crisis. We’re going to have to think about what direction we want to advocate for. Getting Medicaid expansion in those holdout states, which also have high HIV rates and low PrEP uptake? That would alleviate a lot of uncompensated costs,” he says, because Medicaid would then cover visits and labs.
But then again, these deeply conservative states continue to refuse to expand Medicaid, even in the face of offers from the federal government to cover the cost 100% versus the preexisting 90% and amid ballot initiatives in some states that have demanded the expansion. Some Democrats in Washington, D.C. are even backing a bill that would let folks in those states sign up for Medicaid directly with the federal government.
Another option, PrEP-wise, continues Farrow, is that “we may still need the federal government to create something like a stand-alone PrEP access program,” taking the savings on generic PrEP and plowing it into PrEP wraparound services like clinic visits, labs, and even perhaps transportation to get people to and from visits.
Such a program, he says, could be modeled on the Ryan White program—which gets HIV meds, care, and other essentials to Americans not covered in any other way—or it could even be a part of Ryan White, assuming Congress allocated extra money for it.
But exploring such directions is in its early days. “There’s no community consensus on which way to go,” Farrow says.
He’s echoed by Tim Horn, director of health care access at NASTAD, an advocacy group for officials who administer HIV and hepatitis programs in the U.S. “This conversation is beginning to take shape, but it’s happening two years too late,” says Horn, who prefers a standalone program, not something within Ryan White. “Medicaid expansion would definitely help, but we’ll still have people who [earn too much for even expanded Medicaid], so a payer of last resort would be important.”
Farrow and Horn agree that one thing is clear: We have to look past 340B and charity programs, and the strange ways that they leverage astronomical drug retail prices to fund basic health care at community clinics. As more generics come online, such programs will yield far less revenue for clinics.
“Our PrEP and prevention financing in the U.S. is a house of cards because we’ve become so dependent on these 340B revenues,” says Horn. “We’re at a critical crossroads now. We need to think about how we create sustainable solutions for these health centers and make these programs whole.”