As drug costs rise, nonprofit pharmacies respond

The average American healthcare consumer has a lot to worry about. Necessities are in short supply, inflation is soaring, and markets are volatile.

We can also add rising prescription drug costs to this turbulent mix. According to a January 2022 Congressional Budget Office report, nationwide prescription drug spending has skyrocketed from $30 billion in 1980 to $335 billion in 2018.^[] During the same timeframe, per-capita spending on prescription drugs increased from $140 to $1,073.

Greater economic strife, combined with rising drug costs, may prompt patients to skip doses, forgo refills, or never fill their scripts in the first place.

Nonprofit pharmacies, explained

Typically structured as 501(c)3 organizations, nonprofit pharmacies provide prescriptions at no or low cost to the uninsured and underinsured. Each nonprofit pharmacy has its own eligibility requirements. Many use the federal poverty level to determine eligibility, setting the bar anywhere from 100% to 300% below the benchmark. Some also account for health-insurance status. 

Nonprofit pharmacies operate in several ways, and it’s essential to know how your local nonprofit does business before you start referring patients. For example, some nonprofit pharmacies are open-door facilities, like any big-brand or independent location. Some, however, are online only, and others are closed-door distribution hubs for local nonprofits and clinics. 

Typically, nonprofit pharmacy formularies are therapeutically broad.

But they also dispense something else that’s equally, if not more, important: education.

Educating communities

Donney John, PharmD, is a board member of Charitable Pharmacies of America. He’s also the executive director of NOVA Scripts Central, a northern Virginia–based nonprofit pharmacy. In an exclusive interview with MDLinx, John said that community health education is a cornerstone component of nonprofit pharmacies.

For NOVA Scripts, that looks like events in libraries, churches, and other community venues where they seek to understand the community and make learning interactive. These events address social stigmas associated with illness, how to use insurance, connecting the uninsured with support networks, or even providing food and housing assistance.

“We try to provide a pragmatic, culturally competent approach to education,” John said. “Everything we do is focused on health literacy and cultural competency.”

This educational component of the nonprofit pharmacy mission is about thinking beyond medication, John said. 

Of course, funding community education, discounted prescriptions, and paying a pharmacy staff is no small financial feat.

The business of nonprofit pharmacies

For example, John’s pharmacy charges $5 for every prescription on their formulary. That fee covers the administrative costs of filling the prescription, but total cost falls between $21 and $22.50, depending on market conditions. 

“As you can see, we’re not in the business of making money,” John said.

Like many other nonprofit pharmacies, NOVA Scripts relies on grants. In contrast,  Charitable Pharmacies of America has a membership fee, whereby members receive access to donate medications from distribution networks.

One of those networks is Dispensary of Hope. Matt Blount is the director of brand and marketing at the nonprofit. In an interview with MDLinx, Blount said that Dispensary of Hope is the connective tissue in this growing network of nonprofit pharmacies connecting community-based pharmacies with drugs donated by more than 50 manufacturers. Pharmacies pay nothing for these meds.

In addition to distribution, one of Dispensary of Hope’s primary roles is quality control. Patients and clinicians can rest assured that medication has been sourced, secured, and distributed safely and properly. 

“We do that because we believe that people deserve to have medication at the same level instead of introducing more risk into their lives,” Blount added.

How to work with these pharmacies

The prospect of free or discounted, quality-controlled medication for patients in need probably has your attention. John and Blount have some suggestions for connecting patients to your local nonprofit or independent pharmacy, and for saving patients money.

Think twice about coupons. Coupons may offer one-off savings, and they may also require patients to bounce between multiple pharmacies, increasing the possibility for error. Instead, John suggested using a service like MedHelp, which will point patients to the most affordable drug option near them within 1-2 business days.

If drugs are free, lead with free. A $10 or $20 charge might not seem like a lot, but it can add up for patients on maintenance medications, Blount said. To encourage compliance and trust, tell patients up front that drugs at a specific facility will be low- or no-cost. “That removes that barrier completely for the patient,” Blount said.

Build relationships with local nonprofit and independent pharmacies. “Most independent pharmacies have programs that will work with physicians’ offices to help people who are uninsured or underinsured,” John said. “You really need to be mindful of where [patients] are going or what they’re getting.”

Lower cost, educate, and improve adherence. By connecting patients to independent or nonprofit pharmacies, and by properly educating them in a culturally competent manner, you’re setting them up for adherence, John explained. “Look at somebody’s preference of language and make sure they understand to improve adherence.”