There’s a way to buy prescription drugs for 50 percent off that’s perfectly legal, but requires so much red tape that few people know how to take advantage of it, or even know about it. Except for Wellpartner.
This company is a Portland, OR-based mail-order pharmacy that I learned about several weeks ago during a meeting with a couple of its investors, Joe Piper and Hans Lundin of Seattle-based Integra Ventures. I had never heard of the federal program known as 340B, in which clinics that care for poor people can buy top-selling medicines like Pfizer’s atorvastatin (Lipitor) at half of the average wholesale price that private insurers get charged. Wellpartner’s ability to help clinics get access to these cheap drugs was part of the reason it raised $16 million in August from Burrill & Co., Credit Suisse, Seattle-based Buerk Dale Victor, and Integra. I followed up with Wellpartner CEO Mike Wright and marketing head Robert Judge to learn more about how this works.
One of the key strategies at Wellpartner is to help clinics that serve the poor quit paying full price. With hardly any notice, it has become the nation’s leading provider of prescription medicines through the 340B program. This program started in the early 1990s, through an administrative rule passed by the Centers for Medicare and Medicaid Services, Judge says. It’s meant to provide a supply of meds to federally qualified health centers that now serve as a safety net for more than 17 million people in more than 6,000 facilities around the country. The problem is that many pharmacies that serve the clinics don’t participate in 340B, because red tape dictates that inventory and accounting of these supplies be kept completely separate, to prevent anybody with a solid income from pulling shenanigans to get their drugs for half-off, Wright says.
“Not everybody is scrupulous about these things,” Wright says.
Wellpartner has developed a way around this. Since 2005, it has managed the inventory for community pharmacies who want to place orders for qualified patients, and the pharmacy doesn’t have to keep its inventory separated, Wright says. What this means is that poor patients who need, say, an AIDS medicine like Gilead Sciences’ emtricitabine and tenofovir (Truvada) will have to make much lower co-payments on a cheaper drug, and therefore, they are more likely to follow doctors’ orders to take it consistently, Wright says.
“If you stop taking your meds, your next step can be the mortuary,” Wright says.
Oregon Health & Science University in Portland has a federally qualified health clinic that can buy these cheap drugs, and other clinics tend to be in highly urban or rural areas, or serve Indian tribes, Wright says. Wellpartner makes its money on the prescription orders through transaction fees, Judge says.
The pharmaceutical companies don’t exactly advertise this on TV or anywhere else I’ve seen. … Next Page »