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"Through this initiative, organizations will be able to stretch scarce resources and buy more of the drugs their patients need," Secretary Thompson said. "The initiative responds to proposals from local safety-net providers and it exemplifies our commitment to support grassroots efforts that improve primary care services for uninsured and underserved Americans."

Through demonstration projects, the new initiative will allow organizations that participate in the 340B drug discount program to take actions to reduce administrative costs and make buying drugs easier for patients. Entities approved for the demonstrations will be able to:

• participate in single purchasing and dispensing systems that serve covered entity networks;
• contract with multiple pharmacy services providers; and
• use contracted pharmacy services to supplement in-house pharmacy services.

By being able to undertake these activities, community health center networks and other covered entities will improve their economies of scale, allowing individual centers to purchase more drugs without increasing total expenditures. Contracting with multiple pharmacy service providers and supplementing in-house pharmacy services will improve patients' access to prescription drugs by increasing the number of pharmacy sites where these drugs can be obtained. This is an important improvement because patients of safety-net providers often cannot afford to travel from their neighborhoods to a distant pharmacy to have prescriptions filled.

Currently, organizations eligible to participate in the drug discount program -- established by Section 340B of the Public Health Service Act -- cannot take these cost-saving steps.

The 340B discount program requires drug manufacturers to sell drugs to specified safety-net health care providers at a discount rate determined by a formula in the legislation that created the program. Discounts average 25 percent to 40 percent on most drugs.

Approved demonstration projects will be time limited and will be evaluated on benefits provided as well as on compliance with requirements of the 340B law. If the demonstrations are successful, the new methods of accessing discounted drugs will be incorporated into the 340B program's published guidelines. Eligible organizations should submit proposals to the Health Resources and Services Administration's Office of Pharmacy Affairs. HRSA is the lead HHS agency for improving access to health care for individuals and families nationwide.

For a description of the proposal requirements and to review criteria, go to www.hrsa.gov/odpp and click on What's New.

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