Thundermist laid off 150 employees in 2024. How drug makers played a role

Yahoo

04-03-2025

WOONSOCKET – What would you do if you had $5 million?
For Matthew Roman, the chief operating officer of Thundermist, the answer is easy: prevent 150 employees of the community health center from being laid off last September due to financial troubles.
In Roman's case, the question is not just hypothetical. Thundermist lost $5 million last year in potential revenue due to drug makers' skimping on a federal program designed to help safety-net providers that care for low-income patients.
'Last year alone, Thundermist lost $5 million because of the pharmaceutical restrictions. Guess what that $5 million would have done? We would still have 150 employees here,' Roman said at an event at Landmark Medical Center in Woonsocket last week.
Rhode Island's community health centers, which provide primary, dental and behavioral care for one in five Rhode Islanders, have been struggling financially. Over half of their patients are on Medicaid, and reimbursement rates have not kept up with rising costs of supplies, services and salaries.
There is another significant pain point: the 340B Drug Discount Program.
Created by Congress in 1992 through the Veterans' Health Care Act, the 340B program was designed to help health care providers who serve low-income or uninsured patients buy drugs at a discounted rate. This allows organizations like community health centers to make drugs accessible to patients who may otherwise not be able to afford them.
It also serves as a source of income. Health care providers buy drugs at discounted rates and earn the difference between what they paid and the reimbursement. The program requires this revenue to be reinvested into the organization.
'Those dollars are often referred to as 'access dollars' because the organizations reinvest them into services to provide additional access. That could be in the form of community health workers where there's not enough funding to support them,' Roman explained.
Safety-net providers have relied on revenue from the 340B program to supplement low reimbursement rates, but in recent years, drug makers have imposed restrictions on which pharmacies are included in the program, cutting their earnings.
This has had a drastic effect on the bottom lines of community health centers. Since 2020, six of the eight community health centers in Rhode Island have seen their revenue from the 340B program decrease by $16 million, according to the Rhode Island Health Center Association. (This figure does not include Thundermist or Blackstone Valley Community Health Care.)
The 340B program is not without its critics. The Government Accountability Office (GAO) found in the past that some hospitals participating in the program prescribed more expensive medications. There is evidence, too, that some hospitals strategically adjust their status to qualify for the program and target wealthier communities.
In 2022, GAO recommended that the Health Resources and Services Administration, which oversees the program, scrutinize which organizations qualify for it. GAO also recommended that more stringent oversight be given to prevent organizations from receiving duplicate discounts from federal programs.
Two bills in the General Assembly are seeking to regulate drug makers who put restrictions on the 340B program.
House bill H5634 sponsored by Rep. Jon Brien – an Independent from Woonsocket and North Smithfield – and a sister bill in the Senate – S0114 – sponsored by Bridget Valverde – a Democrat from North Kingstown, East Greenwich and South Kingstown – would prohibit drug makers from restricting which pharmacies can participate in the 340B program in Rhode Island. The bills would also prohibit them from reimbursing organizations participating in the 340B program at rates lower than those paid to organizations outside the program.
Similar bills failed to pass last year, but the community health centers and hospitals in Rhode Island are hoping to get a win this legislative session. Part of their argument is that the drug makers, not the state, would bear the cost of the 340B program.
'It's one of those things where, pass the legislation, it does not cost Rhode Island one cent,' Roman said.
This article originally appeared on The Providence Journal: Bills aim to regulate drug makers who restrict 340B drug program in RI