Healthcare centers that provide the HIV-prevention medication PrEP in some states are facing financial peril after the maker of the drug slashed a crucial revenue stream.

But centers in Pennsylvania and other Medicaid-expansion states will be less impacted by the change, Pittsburgh providers say. They expect to continue providing PrEP, a daily pill that prevents HIV with about 99% effectiveness, without disruption.

The issue began in April 2021 when Gilead Sciences, which manufactures PrEP medications, announced changes to its patient assistance program that would significantly reduce the amount of money it reimburses clinics for providing the drugs to uninsured patients. Gilead would continue providing free PrEP to those without insurance through the program, but the money it paid clinics on top of that, which provided clinics with extra revenue, would be much less. 

The company said in a December press release that the change is necessary to ensure it can continue providing free PrEP for uninsured patients, and that the use of its program as a funding mechanism for clinics was “unintended.”

In non-Medicaid expansion states like Texas and Florida, where a large number of people do lack health insurance, clinics have come to rely on the Gilead revenue. News of the policy change left providers and HIV prevention advocates panicked, fearing some clinics would have to cut back on services or even shut down. Clinics in the South, where half of new HIV cases occur, are expected to be hit especially hard.

Community medical providers working in underserved communities are “expecting a real catastrophe come January,” said Kenyon Farrow, managing director of advocacy and organizing for the national organization Prep4All, in a December interview with PublicSource.

Met with public outcry, Gilead delayed the start date of the policy change from Oct. 1, 2021, to Jan. 1, 2022.

Because Pennsylvania is one of 38 Medicaid-expansion states, healthcare centers in the state serve significantly fewer uninsured people and, consequently, receive far less funding through Gilead’s patient assistance program. Pittsburgh clinics will be somewhat impacted by the loss in revenue, providers said, but the change likely won’t be detrimental to their bottom lines, and PrEP will still be available to anyone who wants it. 

Dr. Stacy Lane, founder of the Central Outreach Wellness Center, said the center used Gilead’s funding for crucial services that weren’t covered by grants.

“We don’t have a grant that can get somebody an Uber to their medical appointment when they’re sick. We don’t have a grant that can buy someone a winter coat,” Lane said. “And that’s the type of thing we can do with this money, because it is very unrestricted.”

To learn more about PrEP and find a provider near you, visit PrEP Pittsburgh’s website

Lane and other local providers are also concerned about what the new policy means for PrEP access throughout the country. 

“There are so many clinics that are wholly dependent on this program,” Lane said. “And without it, they will fold.”

Below, we answer some key questions about Gilead’s change and what it means for PrEP access in Pittsburgh. 

What is Gilead’s patient assistance program, and what changes did Gilead make to the program?

Through its Advancing Access Patient Assistance program, Gilead provides free PrEP to uninsured people by giving clinics a rebate for the medication. Until Jan. 1, the rebate equaled the retail price of the medication — even though clinics received the medication for a discounted cost — meaning they could keep the difference as revenue.

Gilead would not disclose the cost of its PrEP medications, Truvada and Descovy. But according to Med City News, the retail price of both medications is about $1,700 per month

Gilead’s rebate policy was similar to the 340B Drug Pricing Program, a federal program that provides extra funding to safety net hospitals and clinics. The program requires drug manufacturers to sell medications to those clinics at a heavily discounted cost. Those clinics can then bill insurance companies for the retail price of the medication and keep the difference, or the ‘340B spread,’ and use the money to provide free care.

“In essence, Gilead was acting like an insurance plan,” said Sean DeYoung, CEO of Allies for Health + Wellbeing, another Pittsburgh-based PrEP provider. 

That led clinics in non-Medicaid expansion states, which are concentrated in the South, to rely on Gilead’s rebates to fund things like lab tests, community outreach and transportation for patients.

“It was just unsustainable,” Carl Schmid, executive director of the HIV + Hepatitis Policy Institute, said of the policy. “It was not the way the system should work. But people took advantage of it … and they used that additional money for building up PrEP systems and doing outreach and paying for the labs.”

In April 2021, Gilead announced it would continue to provide free PrEP for uninsured people but would reduce the amount it reimbursed pharmacies to “the amount paid for each bottle” of medication, plus a dispensing fee and administrative fee. 

“Under the previous model, some organizations acquired deeply discounted bottles of our medicines, dispensed them to program participants at no cost, and obtained reimbursement from Gilead for the medicines at levels far above the amounts they paid,” a Gilead representative wrote in an email to PublicSource. “The use of our Advancing Access free drug program as a funding mechanism was unintended and is unsustainable.”

Why is Pennsylvania less affected?

Pennsylvania safety net clinics are far less dependent on Gilead’s pocketbook, providers said, because the commonwealth is a Medicaid-expansion state, meaning anyone below a certain income level qualifies for state insurance. When a clinic in Pennsylvania receives an uninsured patient, they can help them sign up for Medicaid within a few months, and Medicaid then pays the clinic the 340B spread rebate.

Allies for Health + Wellbeing typically helps uninsured patients enroll in Medicaid right away, DeYoung said, so only about 10 patients are on Gilead’s patient assistance program at any given time. The difference in reimbursement depends on the clinic but for Allies, it will likely be between $400 and $500 less per person per month, he said, so the organization will “feel a little bit of a hit.” Still, DeYoung said the amount of money Allies will lose from Gilead’s rebates will be minimal.

Central Outreach, which provides PrEP in Western Pennsylvania and Ohio, has about 150 patients on Gilead’s program at a time, Lane said. But like Allies, the clinic quickly helps its patients get insured, so they typically aren’t enrolled in the program for long.

What does this mean for health equity?

HIV prevention advocates and providers worry that the change in Gilead’s policy could exacerbate existing public health inequities. Southern states are home to 38% of the U.S. population but account for over half of new HIV cases each year, according to the Centers for Disease Control and Prevention [CDC]. Similarly, Black people make up just 13% of the U.S. population but account for more than four in 10 new HIV cases.

Unequal access to PrEP since it first became available in 2012 has contributed to those disparities, PrEP4All’s Farrow said. Research shows that PrEP users are overwhelmingly male and white, and that PrEP use is disproportionately high in northeastern states compared to the South, West and Midwest. 

“These changes, where you further gut the programs that exist to help poor uninsured folks access PrEP, folks just won’t have access to PrEP,” he said. “And you will likely see a further entrenchment of HIV being a virus impacting Black folks in the Southern states.”

What’s the solution?

While some providers and advocates called on Gilead to reverse or delay its policy change, all agreed: The problem is bigger than Gilead. A more robust, coordinated governmental effort needs to be made, they said, to prevent the spread of HIV and expand PrEP access throughout the country.

Last month, the CDC began allowing PrEP clinics to use a portion of its grant money for ancillary PrEP services like tests and office visits, rather than medication only. Many providers and advocates viewed the loosened restrictions as progress.

Two bills were also introduced in Congress last month that would establish a federal PrEP program. The House’s PrEP Assistance Program Act would give states and community providers $400 million each year for PrEP services and outreach, while the Senate’s PrEP Access and Coverage Act would fund PrEP programs and would eliminate PrEP copays for people with health insurance.

“We’re going to have to not just focus on shoring up the infrastructure that we have but actually expanding it, if we really are going to end the HIV epidemic in the United States,” Farrow said.

Juliette Rihl is a freelance reporter. She can be reached at juliette@publicsource.org or on Twitter @julietterihl.

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Juliette Rihl

Juliette Rihl reports on criminal justice, public safety and mental health for PublicSource. Her 2020 series on how court debt impacts low-income Allegheny County residents prompted the county to join...