Insulin prices have fallen. But some indigent patients pay more.

Maricruz Salgado controlled her diabetes. Thanks to a federal program that allowed clinics serving indigent people to buy medications at greatly reduced prices, she was able to pay just under $75 every three months for all five diabetes medications.

But in July, prices for three of these drugs shot up. Ms. Salgado, who does not have health insurance, suddenly faced costs of hundreds of dollars a month. She couldn’t afford it.

The doctor prescribed her cheaper medications. Within days of taking one, she experienced such severe dizziness that she said she had difficulty keeping up with her busy schedule as a phlebotomist and home care aide. When she returned to the doctor in September, her blood sugar levels had spiked.

“We were in a good place,” said Dr. Wesley Gibbert, who treats Ms. Salgado at Erie Family Health Centers, a chain of clinics in Chicago that serves patients regardless of their ability to pay. “And then all the medications had to be changed.”

The clinic’s price increases occurred for a reason that is symptomatic of the tangled web of federal policies regulating drug prices. In 2024, drugmakers lowered the sticker prices of dozens of popular drugs, allowing them to avoid huge penalties imposed by the American Rescue Plan, the Covid relief package that was passed three years earlier. But this change has backfired on low-income people like Ms. Salgado.

The decision to make these drugs more affordable for a immense group of patients has quietly created another problem: a major financial blow to the clinics the federal government has contracted to care for the nation’s poorest people. These non-profit clinics operate in every state and serve almost 32.5 million peopleor about 10 percent of the country’s population.

“It’s the law of unintended consequences,” said Beth Powell, pharmacy director at The Centers, which operates five local clinics in the Cleveland area. Ms Powell said that while many consumers had benefited from companies’ decisions to cut prices, “this is not the case for our people”.

More than 1,000 local clinics across the country take advantage of a decades-old federal program that requires drug companies to offer them deep discounts.

Under the 340B program, as it is called, companies typically sell their brand-name drugs to clinics at a discount of at least 23 percent of the list price. The same rebate system applies to state Medicaid plans. However, if the company raises the drug’s list price above inflation, a penalty kicks in that forces it to offer even greater discounts to clinics.

For years, this meant that every time the company raised the list price of a drug above inflation, local clinics paid less for it. Many medicines, including insulin, have essentially become free.

However, the American Rescue Plan introduced a major change that imposed even greater penalties on drug companies for raising prices. In January 2024, companies that continued to augment the price of the drug would have to pay state Medicaid plans whenever these drugs were used, potentially costing the industry billions of dollars.

“It was a bridge too far” for companies, said Antonio Ciaccia, a drug pricing researcher who advises state governments and employers.

An analysis by the research institute shows that in 2023 and 2024, manufacturers reduced the prices of at least 77 drugs. unprofitable run by Mr. Ciaccia. The list includes commonly used asthma medications such as Advair and Symbicort, as well as diabetes medications such as Victoza, which Ms. Salgado was taking before the switch.

As drug companies lowered their list prices, inflation penalties disappeared. This meant community clinics had to start paying the usual rebates of at least 23 percent off the list price – much more than they were previously paying a pittance.

“Unfortunately, the complexity of the U.S. health care system may limit access and affordability for many people,” Jamie Bennett, a spokeswoman for Novo Nordisk, which makes Victoza, said in a statement. “Even if we lower prices, too often people don’t get the savings – that’s the problem.” She said the company also runs patient assistance programs that make its products cheaper.

David Bowman, a spokesman for the Health Resources and Services Administration, which oversees the 340B discounts, did not respond to questions about the impact of reduced drug prices on local health clinics. He said other recent policies, including requiring Medicare to negotiate drug prices, have lowered drug costs for low-income patients.

Due to a six-month delay in the operation of 340B discounts, the changes affected clinics in July last year. Some clinics began calling patients before their prescriptions expired, offering to switch to cheaper drugs, even though they sometimes caused more earnest side effects. Others decided to cover higher own costs, which required reaching into already circumscribed reserves.

Ms. Salgado said a nurse from Erie called her over the summer and told her about the price changes. Until then, she was paying about $15 for a three-month supply of Victoza, which is administered by daily injection to lower blood sugar levels. After July, the cost increased to over $300.

After a few weeks, Mrs. Salgado became accustomed to the replacement Byetta and her dizziness disappeared. But the drug must be injected twice a day, not once. Ms. Salgado now must exploit a special pharmacy 20 minutes from her home to qualify for a federal discount on the two insulin medications she was switched to, the result of increasingly stringent rules companies are imposing on doctor’s offices.

Ms Salgado, 39, said she was determined to avoid the fate of her mother, who died of complications of diabetes at the age of 54. However, keeping up with recurrent pharmacy visits and medication changes is arduous. “Sometimes it comes to a point where I just don’t want to do it anymore,” she said.

The changes also make it more arduous for local clinics to provide other services.

Under the 340B program, clinics purchase discounted drugs on behalf of their patients. When these patients have insurance, clinics can then charge insurers the normal, higher price, pocketing the difference. But now that disparity – the difference between what they pay for a drug and what insurance will cover – has narrowed. That left clinics with less money to spend on services that wouldn’t otherwise be covered by government subsidies or insurance, such as helping patients find housing.

At Valley View Health Center, a chain of clinics serving patients in rural Washington state, $340 billion in funding once funded a mental health program staffed by eight therapists. In September, the clinic halted the program, laying off therapists.

“It was such an abrupt change for us that it definitely impacted our ability to care for patients in the way we needed to,” said Gaelon Spradley, the clinic’s chief executive.

Some patients whose costs have increased have qualified for patient assistance programs offered by drug manufacturers. This was the case for Lorena Sarmiento, another Erie Health patient who uses Lantus, an insulin pen. Last fall, after changing the 340 billion rebate, it was priced at $490 at her pharmacy – retail price for a box of insulin pens. Erie Health sent her to another pharmacy, which helped her take advantage of a manufacturer’s coupon that lowered her costs to $35 a month.

Doctors and pharmacists from several health clinics say that such programs to facilitate pharmaceutical companies may prove unsuccessful. Sometimes they last for a circumscribed time or require regular re-use by the patient. Patients often must be legal residents of the United States or have a indefinite address.

“It’s a long process and a lot of jumping through hoops,” said Michael Lin, chief of pharmacy at Family Health Centers in Louisville, Kentucky.

Ms. Sarmiento and her husband, Luis, spend about $500 a month on her medical needs, including special foods, medications and a blood glucose monitor. They no longer have to pay top prices for insulin, but their costs are still 10 times higher than they were a few months ago, when they were spending about $10 for three months of insulin.

Mr. Sarmiento said he tries not to complain. “You always have to look on the radiant side,” he said. “But it’s been arduous lately.”