INDIANAPOLIS — An Indianapolis health care provider is raising concerns about a proposed Medicaid change that could affect access to medications for low-income patients.
Indiana plans to eliminate a federal discount drug pricing program known as 340B for Medicaid managed care patients. Leaders at the Damien Center say the move would have serious consequences, especially for vulnerable communities.
“This is not good for Hoosiers. It’s not good for health care, and it’s especially not good for rural communities,” said Alan Witchey, president and CEO of the Damien Center.
Witchey says the 340B Drug Pricing Program allows providers to purchase medications at a discounted rate while billing insurance at standard rates.
“In its simplest terms, it is a discount program,” Witchey said. “We get to buy medications at a discount, but then we get to bill insurance companies and insurance plans at a normal rate.”
In a public notice, the Indiana Family and Social Services Administration and the Office of Medicaid Policy and Planning outlined their plan to instead pursue manufacturer rebates through the Medicaid Drug Rebate Program. Officials estimate the change would save about $63 million annually.
Witchey says the impact on providers like the Damien Center would be significant.
“It’s devastating for us if it gets taken away,” he said. “It’s between $5 million and $6 million to us annually.”
He added that the program is funded by pharmaceutical companies and does not rely on taxpayer dollars.
The Damien Center provides primary care services to thousands of patients, including about 1,800 people living with HIV, and sees more than 2,000 patients for hepatitis C and sexually transmitted diseases.
“Most people come here and get their medications at no cost,” Witchey said. “The people who do get them for a cost are very, very small, and we can provide the medical care for a very, very low cost of about $8 per person. That cost will dramatically go up.”
In a statement, the Family and Social Services Administration said:
"Indiana joins other states that have carved out 340b drugs from Medicaid. Providers will still be able to leverage 340b savings, just not for Medicaid prescriptions. The change, authorized in HEA 1001-2025, enhances prudent stewardship of taxpayer dollars appropriated for the Medicaid program, by ensuring those resources are used in the Medicaid program."
“They’re sending two-thirds of it to the federal government and only keeping a third of it,” Witchey said. “It just doesn’t make good sense for Hoosiers. It doesn’t make good sense for health care.”
A copy of this notice is now on file at the Indiana Government Center South, 402 West Washington Street, Room W451, Indianapolis, Indiana, and is open for public inspection.
Also, a copy of this notice is now available and may be inspected by contacting the local county Division of Family Resources office, except in Marion County, where public inspection may be made at 402 West Washington Street, Room W374, Indianapolis, Indiana.
There will be no public hearing. Written comments will be accepted until 5 p.m. on March 27, 2026, and may be directed to FSSA, Office of Medicaid Policy and Planning, Attention: Conner Ortman, 402 West Washington Street, Room W374, Indianapolis, IN 46204 or by email to spacomment@fssa.in.gov. Correspondence should be identified in the following manner: COMMENT RE: 340B DRUG PROGRAM. Written comments will be made available for public inspection at the address herein of OMPP.
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