Unused Drugs Redirected to Uninsured Patients

Charitable drug distributors are improving access to essential medications for low-income, uninsured patients in the United States.

One such organization, the Dispensary of Hope (DoH), has collected more than $150 million in medications from both manufacturers and health-systems since its founding in 2003.

In 2014 alone, DoH received $32.78 million in donated medications, retained a drug inventory of $8.07 million, and distributed $10.5 million worth of medications that were dispensed during more than 47,000 encounters at no cost to the patients.

DoH CEO Christopher Palombo, MA, MSHM, FACHE, told Pharmacy Times in an exclusive interview that participating manufacturers and health-systems are motivated to donate by moral imperatives and economic incentives.

“The reality we explain to manufacturers [and other donors] is it’s weird to destroy something while there are uninsured people who otherwise wouldn’t have the medications they need,” Palombo said.

In economic terms, he explained, drug manufacturers regularly overproduce medications. Once those drugs are within 6 months of expiration, companies are unable to sell them and often incinerate the inventory.

This process comes at a cost to manufacturers, but if they had donated the drugs to DoH instead, there would be “absolutely no opportunity cost,” Palombo asserted.

Although the charity is technically not subject to the rules and regulations of the Drug Quality and Security Act, it still chooses to follow the guidelines “with the same rigor” as other dispensaries in an effort to mitigate risk and placate concerns about possible drug diversion, DOH chief supply chain officer Scott Cornwell told Pharmacy Times.

“We don’t want to be in the second tier of a health-system,” he explained. “We choose to be compliant with the exact same regulatory regimen as other dispensaries to preserve the dignity of the patient.”

While the concept of drug donation is becoming mainstream, charities like DoH still face certain challenges.

For instance, the costs incurred by a health-system to dispense medicines are high. At a minimum, a health-system must pay a pharmacist and pharmacy technician to dispense the drug, though “not everyone is able to do this,” Palombo said.

Beyond cost, he described a “learning curve” in the industry about how charitable drug collaborations actually work.

“Trying to do something different in the pharmaceutical industry, in general, is in and of itself a challenge. People just don’t know enough about the process,” Palombo explained. “But once we get to the manufacturers and physicians and speak with them directly [about the initiative]…they see it really is a win-win with no downside.”

The potential impact of charitable drug distribution is substantial.

The Congressional Budget Office estimates that 30 million individuals will remain uninsured after the Affordable Care Act is fully implemented, and internal calculations from the DoH suggest that there are billions of dollars in surplus medicines each year.

In light of those figures, Palombo said the drug donation model is “really a no-brainer.”