TITLE
Recommendation to increase appropriations in the Health Fund Group in the Health and Human Services Department by $437,000, offset by 340B Pharmacy Program revenue. (Citywide)
DISCUSSION
On September 4, 2018 and February 12, 2019, the City Council authorized contracts with Wellpartner, LLC (Wellpartner), Bella Vida Pharmacy, Inc. (Bella Vida), Cardinal Health 110, LLC, and Cardinal Health 112, LLC (collectively, Cardinal), and Apexus, LLC, Inc. (Apexus), for the purpose of launching the 340B Pharmacy Program. The 340B Pharmacy Program allows the Health and Human Services Department (Health Department) to purchase outpatient prescription drugs at preferential, reduced prices to offset deficits in the HIV Clinic, as well as possibly expanding services. Under the 340B Pharmacy Program, Bella Vida acts as the Contract Pharmacy, Wellpartner acts as the Administrator, and Cardinal acts as the Distributor/Drug Wholesaler. Signing a Participation Agreement with Apexus has allowed the Health Department to participate in the 340B Prime Vendor Program, through which the Health Department is able to receive the 340B-eligible drugs from Cardinal.
Prior to the inception of the 340B Pharmacy Program, the City’s anticipated annual cost was estimated at $213,000 for prescription medications at the reduced 340B cost, offset by $388,000 in annual gross revenue. Both revenues and expenditures exceeded expectations in FY 19; in the one quarter that the program was in operation, expenditures exceeded $250,000 and net revenue was approximately $364,000. The Health Department is estimating $650,000 in expenditures for FY 20, which requires an increase of expenditure appropriation of $437,000. Expenses are estimated to be offset by $957,000 in gross revenue, less administrative and dispensing fees. The net revenue of $307,000, up from $175,000, will be used to offset deficits in the HIV Clinic, as well as possibly expanding services.
This matter was reviewed by Deputy ...
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