Video Reporter: Caresse Jackman, InvestigateTV; Video Editor: Scotty Smith, InvestigateTV

When three teenagers died of fentanyl overdoses last year in Larimer County, Colorado, it shocked the community and “flipped families upside down,” said Tom Gonzales, the county’s public health director.

Several schools began stocking naloxone, a medication that reverses opioid overdoses. Community organizations trained teens to use it. But county and school officials wanted to do more.

That’s when they turned to opioid settlement funds — money coming from national deals with health care companies like Johnson & Johnson, AmerisourceBergen, and CVS, which were accused of fueling the epidemic via prescription painkillers. The companies are paying out more than $50 billion to state and local governments over 18 years.

Much of that money is slated for addiction treatment and efforts to reduce drug trafficking. But some is going to school-based prevention programs to reduce the possibility of addiction before it begins. In some cases, school districts, which filed their own lawsuits that became part of the national settlements, are . In other cases, state or local governments are setting aside part of their share for school-based initiatives.

Many parents, educators, and elected officials agree that investing in prevention is crucial to address the rising rates of , , and .

“We have to look at the root causes,” said , a senior scientist at the University of North Carolina-Chapel Hill and leading expert on applying prevention science to public policy. Otherwise, “we’re going to be chasing our tails forever.”

But the question of how to do that is fraught and will involve testing the comfort levels of many parents and local officials.

For generations of Americans, addiction prevention was synonymous with D.A.R.E., a curriculum developed in the 1980s and taught by police officers in schools. It “dared” kids to resist drugs and was used in concert with other popular campaigns at the time, like “just say no” and a in a frying pan with the narration, “This is your brain on drugs.”

But found those approaches . In some cases, suburban students their drug use after participating in the D.A.R.E. program.

In contrast, prevention programs that today’s leading experts say teach kids how to manage their emotions, communicate with others, be resilient, and build healthy relationships. They can have while also saving society $18 for every dollar invested, per a . But that approach is less intuitive than simply saying “no.”

If you tell parents, “‘We’re going to protect your child from dying of a fentanyl poisoning by teaching them social skills in third grade,’ they’re going to be angry at you,” said , who leads prevention-oriented research at the nonprofit Partnership to End Addiction. Selling them on the most effective approaches takes time.

That’s one of the reasons prevention experts worry that familiar programs like D.A.R.E. will be the go-to for elected officials and school administrators deciding how to use opioid settlement funds. When ºÚÁϳԹÏÍø News and InvestigateTV looked for evidence of local spending on prevention, even a cursory review found examples across half a dozen states where governments have already allocated $120,000 of settlement cash to D.A.R.E. programs. The curriculum has been revamped since the ’80s, but the effects of those changes are still being studied.

Budgeting Choices Reflect Deeper Debate

Researchers say putting money toward programs with uncertain outcomes — when more effective alternatives exist — could cost not only valuable resources but, ultimately, lives. Although $50 billion sounds like a lot, when compared with the toll of the epidemic, each penny must be spent efficiently.

“There’s tremendous potential for these funds to be wasted,” said , executive director of the Colorado State University Prevention Research Center.

But he has reason to be hopeful. Larimer County officials awarded Riggs’ team $400,000 of opioid settlement funds to build a prevention program based on the latest science.

Riggs and his colleagues are developing training for school staff and helping implement the , a widely for students at risk of depression. The program, which will start in 10 middle and high schools this fall, teaches students about resilience and builds social support through six small group sessions, each an hour long. It’s been shown in multiple studies to decrease rates of depression and drug use among youth.

Natalie Lin, a 17-year-old senior at Fossil Ridge High School in Fort Collins, Colorado, is optimistic the program will help overcome the stigma her peers face with mental illness and addiction.

“Having it in school” prevents people from feeling “called out” for needing help, said Lin, who carries naloxone in her car so she’s prepared to reverse someone’s overdose. “It’s just acknowledging that anyone here could be battling” addiction, and “if you are, that’s all right.”

Across the country, investments in prevention run the gamut. Rhode Island is using about $1.5 million of settlement cash to increase the number of in middle and high schools. Moore County, North Carolina, is on a mentoring program for at-risk youth. Some communities are inviting guest speakers and, of course, many are turning to D.A.R.E.

New Hanover County, North Carolina, and the city of Wilmington, which it encompasses, pooled $60,000 of settlement money to train nearly 70 officers in the D.A.R.E. program, which they hope to launch in dozens of schools this fall.

County commissioner Rob Zapple said it’s one piece of a “multiprong approach” to show young people they can lead productive lives without drugs. Officials are also putting $25,000 of settlement cash toward public service announcements and $20,000 toward other outreach.

They acknowledged there’s little research on the updated D.A.R.E. curriculum but said the county views its investment as a pilot, which they will track closely. “Instead of committing everything at once, we’re going to let the spending of the money grow with the success of the program,” Zapple said.

Munster, Indiana, also decided to , using $6,000 — a small slice of its total settlement funds — annually. Jasper County, Iowa, is to cover materials for the program’s graduation ceremonies for several years.

In some places, officials are frank that they’re not getting enough money to do anything inventive.

Solon, Ohio, for example, received $9,500 in settlement funds this year and is expecting similar or smaller amounts in the future. “While the funding is welcome,” finance director Matt Rubino wrote in an email, it’s “not material enough to be transformational” to the budget. Putting it all toward the existing D.A.R.E. program made the most sense, he said.

Out With the Scare Tactics

, CEO and president of D.A.R.E., said though the program has been in place since the ’80s, “it’s really significantly different” today. The curriculum was redone in 2009 to move away from scare tactics and lectures on specific drugs to focus instead on decision-making skills. Officers undergo intensive training, which includes understanding how children’s brains develop.

“Telling somebody a drug is harmful isn’t going to change their behaviors,” Pegueros said. “You really need to deliver a curriculum that’s going to build those skills to help them change behaviors.”

With the rise of fentanyl and some , interest in D.A.R.E. has grown in recent years, Pegueros said. He believes it can be effective as part of a comprehensive, community approach to prevention.

“You’re not going to find one curriculum, one program, one action that’s going to achieve the results you want,” he said.

Still, D.A.R.E. can play an important role, he said, pointing to a that found the new curriculum had a “positive effect in terms of deterring the onset of alcohol use and vaping” among fifth graders.

But many public health experts remain skeptical. They worry the changes are superficial. The few studies of D.A.R.E.’s new curriculum have been short-term, yielded , and in some cases had high dropout rates due to the covid-19 pandemic, which raises questions about how applicable the findings are for schools nationwide. According to some law enforcement officials and advocates, even the revamped program is often taught alongside campaigns like “,” which warns youth that trying drugs can be fatal the first time.

That type of scare tactic seems futile to , executive director of Think Kids, a nonprofit that advocates for children’s health and well-being in West Virginia. “It’s not as if these kids are unsuspecting and have never seen the consequences of drug use before,” she said.

In 2017, West Virginia in the nation of children living with their own or a parent’s opioid addiction.

“We need stronger communities that are willing to just give those kids more guidance and support than fear,” Caseman said. “They’ve already got enough fear as it is.”

Some local governments are trying to straddle both paths.

Take Chautauqua County in western New York. Last September, the county and a local child-development collaborative spent $26,000 — including — to bring former NBA player Chris Herren to about his past addictions to alcohol, heroin, and cocaine. Herren recounted to more than 1,500 students the first day he had a beer, at age 14; how addiction ended his career; and how he landed on the streets before entering recovery.

, a physical education teacher and the head of the that organized Herren’s visit, said the basketball player’s story resonated with students, many of whom have parents with addiction. “When he talks about selling his kid’s Xbox to get drugs, I think he’s touching on facts that they’ve had to go through,” Smeraldo said.

But a one-time speaker event has , researchers and public health experts say.

That’s why the county is also investing opioid settlement funds in several other initiatives, said Steve Kilburn, who oversees addiction-related grants for Chautauqua County. A likely six-figure sum will go to , a local nonprofit that teaches a nationally acclaimed “” curriculum in 23 schools and runs a “” program that provides one-on-one coaching and support for students found using drugs or carrying drug paraphernalia in school.

, executive director of Prevention Works, said some students are scared to come to school because their parents might overdose without someone at home to revive them.

Smeraldo, the physical education teacher, is planning to build on Herren’s talk with an after-school program, in which students will be able to discuss their mental health and transform interests like cooking into internships to help break the cycle of poverty that often contributes to addiction.

Herren is “the catalyst to get the kid to services that exist in the county,” Smeraldo said. It’s a starting point, not the end.

InvestigateTV is Gray Media Group’s national investigative team and provides innovative, original journalism from a dedicated investigative team and partners. InvestigateTV and its weekend and weekday programs are available on AppleTV, Roku, and Amazon Fire; at InvestigateTV.com; and across Gray’s 113 broadcast markets and digital media properties.

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In early July, as the covid-19 pandemic slammed rural America, the president of a small Kansas hospital sat down on a Friday afternoon and wrote the president of the United States to plead for help.

“I do not intend to add to your burden,” said Brian Williams, a retired Army lieutenant colonel and Desert Storm combat veteran. He said his hospital, Labette Health, was “like a war zone,” inundated with unvaccinated patients. A department head had threatened to resign, saying he could not “watch one more body be carried out.”

But Williams wasn’t seeking pandemic relief.

Instead, he asked President Joe Biden to confront pharmaceutical manufacturers Eli Lilly and Co., Novo Nordisk and others for refusing to honor a federal drug discount program for hospitals and clinics. The program gives Williams millions to pay staff members, ensure remote clinics remain open and provide charity care for patients unable to pay, he said.

“During a global pandemic, I think health care workers deserve a little bit more respect than to have resources taken away,” Williams said in an interview with KHN and InvestigateTV. “Every one of those [drug] companies, I looked them up, and they were not suffering tremendous [financial] losses, as hospitals were.”

Eli Lilly’s stock price increased nearly 40% and the company’s value rose by $59 billion in the first seven months of 2021. In the same period, Labette Health lost $1.2 million in revenue just from the missed savings on prescriptions, Williams said.

Lilly and other manufacturers, though, are holding their ground. They refuse to offer discounts to thousands of hospital-contracted pharmacies, saying the program has grown beyond its intended use and lacks federal checks and balances against duplicate discounts and other abuses. In lawsuits, they contend the billions in discounted sales they provide are rarely passed on to patients and instead are swallowed up by middlemen like contract pharmacies and third-party administrators.

Congress created the so-called 340B program in 1992 to provide extra funding for hospitals and clinics, especially those serving the poor and elderly. The purpose, lawmakers wrote, is to “stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

Companies that want their drugs covered by Medicaid or Medicare Part B are required to offer 340B discounts, typically 25% to 50% off what they might otherwise pay. Hospitals and clinics buy the drugs at the discount and then are reimbursed by an insurance company, Medicare or Medicaid at the higher negotiated rate. The difference is kept by the hospital or clinic to use as it sees fit.

The law does not require patients to benefit directly, a nuance that has fueled great conflict about how the program works and should be regulated.

The 340B program’s reach exploded after federal regulators ruled in 2010 that hospitals and clinics could contract with an unlimited number of retail pharmacies such as Walgreens and CVS, which are paid a fee to dispense the discounted drugs. The growth, coupled with long-held questions about regulatory authority, puts the program at a tipping point, with patients stuck in the middle, industry experts say.

The number of pharmacies contracted to work with 340B hospitals to dispense the discounted drugs has soared. It’s reached more than 31,000 nationwide this year from just over 1,700 in 2010, according to an analysis of federal data by InvestigateTV and KHN.

One eye-popping statistic: The drugs purchased under 340B climbed to $38 billion in 2020 from $5.3 billion in 2010, according to the Health Resources and Services Administration, or HRSA, which oversees the program.

Interests on both sides of the program — hospitals and drugmakers — say they are at the mercy of a program designed with the best of intentions, now run amok, hijacked by for-profit companies and wealthy hospitals trying to profit from its largesse.

Adam J. Fein, chief executive of the industry research organization Drug Channels Institute, estimates that nearly half the nation’s retail, mail and specialty pharmacies now profit from 340B: The program, he said, is “ the pharmacy industry.”

Legal fights about the program have landed before the U.S. Supreme Court, which is slated to hear arguments this month in . The hospital industry is challenging a 2018 rule by the Trump administration to cut reimbursement on certain 340B drugs by 28.5%. As Biden’s HHS secretary, Xavier Becerra has upheld the rule.

Most important, the administration says, is to make sure providers use the savings to benefit patients. In an interview with KHN and InvestigateTV, Rear Adm. Krista Pedley, director of the Office of Special Health Initiatives, which oversees the program within Becerra’s agency, said, “We need legislative changes to help make that happen and require that.”

‘Deeply Troubling’

When Sen. Joe Manchin (D-W.Va.) asked during a about pharmaceutical companies denying the discounts, Becerra said the drugmakers are violating the law.

“I hope what you’ll do is give us more authority” to regulate the program, Becerra said.

Manchin responded: “I really think we could do that in a bipartisan way, because I’ll tell ya, we’re all being affected.”

As California’s attorney general, Becerra led a coalition of national lawmakers federal government to hold the manufacturers accountable for their “deeply troubling” actions to undermine the program. At HHS, Becerra put the companies on notice.

Drugmakers — Lilly, AstraZeneca, Novo Nordisk, Sanofi, Novartis and United Therapeutics — took the matter to court, filing several lawsuits. This month, a federal judge ruled that the companies are not required to provide the discounts. A judge in Lilly’s case criticized the “unilateral” action by drugmakers but that the U.S. government’s effort to force them to honor the discounts was invalid.

Notably, U.S. District Court Judge Sarah Evans Barker in Indianapolis wrote that manufacturers believe they are “at the mercy of a system run amok” and that the program “can no longer be held together and implemented fairly” solely through the agency’s guidance and inconsistent messaging.

Becerra requested $17 million annually for 340B program oversight, a $7 million bump. The money would establish a dispute review panel and increase the audits the agency does on manufacturers as well as the providers.

Williams — at his small hospital in rural Parsons, Kansas — said the nearly $4.3 million the hospital gains each year from 340B has allowed him to add a full-time position for case management, increase staffing hours, develop after-school programs and open clinics in impoverished towns that lacked health care.

The hospital has about 20 pharmacies under active contracts, according to the federal database. Williams said it includes locally owned shops like Bowen Pharmacy as well as corporate giants like Walgreens and Walmart, sites that are convenient for patients. A pharmacy added in 2019 is in Frisco, Texas — a mail-order facility that ships specialty drugs directly to patients’ homes.

Patients, Williams said, directly benefit from the federal program: “I’d love to have the CEO of Eli Lilly come here and I’ll take him around and I’ll show him a town of 1,200 where 40% of the population live below the poverty level.”

“Some of our patients come there on a bicycle or in a wheelchair,” Williams said. “I can go 30 minutes in any direction and find pretty tough people living in pretty … pretty austere circumstances.”

One Hospital, 300 Pharmacies

Vanderbilt University Medical Center, based in Nashville, has added three regional hospitals, clinics and providers in recent years — growth that has fueled its rise in contract pharmacies from zero in 2010 to 300 this year. The pharmacies, which reach across Tennessee and all the way to California, “in each instance serve VUMC patients,” Vanderbilt spokesperson John Howser said.

Financial filings do not disclose how much Vanderbilt gains annually from the 340B program, and Howser declined to disclose the amount. The medical system’s operating revenue grew $649 million, or 13%, to $5.5 billion in fiscal year 2021 compared with 2020, according to its latest financial disclosure. Its operating profit rose 25% to $177 million in 2021 compared with 2020.

According to an amicus brief filed in March for the American Hospital Association v. Becerra case, Vanderbilt spends more than $500 million annually on community benefits, such as charity care. Revenue from the 340B program supports low-income programs including medication assistance, home infusion medications and a pharmacy program at a health clinic run by students.

In the brief, Vanderbilt states the government’s cut in Medicare reimbursement has cost the system $12.4 million in 340B savings and will “impact VUMC’s ability to continue to fund community benefit programs at historic levels.”

Large regional health systems have been particularly active in expanding their contract pharmacy networks. The top three — University of Michigan Hospitals and Health Centers, Cambridge Public Health Commission in Massachusetts and Henry Ford Hospital in Detroit — had zero contracts with outside pharmacies in 2010, and each now has more than 500.

InvestigateTV and KHN contacted the 10 providers with the most contract pharmacies and asked why they saw such growth, how much revenue 340B generates and how the money was used.

While some said the money went for charity care and community programs, others did not respond.

Why not require hospitals to report precisely how they use the savings to benefit patients?

It would be “burdensome,” said Maureen Testoni, chief executive of 340B Health, which represents health systems.

She said her organization does not support mandating new reporting for nonprofit hospitals, which are required to submit annual cost reports and tax filings. The advocacy group has funded research that shows the savings from discounts go to patients. Hospitals enrolled in the program are much more likely to provide free care and specialty services, such as transportation, that are “typically not the ones you can use to pad your pockets,” she said.

Testoni said program growth is good because it means more care can be provided in outpatient settings and by safety-net providers for low-income populations. The bigger sales numbers, she said, could stem from more prescriptions or from higher drug prices. Detailed information about either metric is not public.

“Are we concerned that somehow pharmaceutical companies are being hurt by this?” Testoni said. “Because I’ve never seen any evidence of that in terms of their revenue going down or them having trouble keeping their doors open.”

‘Essentially Taking Over’

Hospitals aren’t required to prove that the large pharmacy networks serve uninsured or needy patients. The larger networks enrich the hospitals and the pharmacies, said Fein of Drug Channels.

A 2018 Government Accountability Office found that a hospital or clinic generally pays a flat dispensing fee — typically from $6 to $15 — for each eligible prescription a pharmacy processed. And pharmacies can contract with multiple health care providers: One Walmart central fill facility in Spring, Texas, contracted with 1,842 340B hospitals and clinics, the InvestigateTV and KHN analysis found.

Recent securities filings for Walmart, Walgreens and CVS Health — the biggest players in the contract pharmacy market —- do not provide line-item detail on how many 340B prescriptions are processed or the revenue those transactions generate. Walmart did not respond to requests for comment. CVS declined to comment.

CVS in an August financial filing that operating income increased by a third between March and June compared with a year ago and noted that 340B business contributed to that increase but provided no further detail. The company acquired 340B contract pharmacy administrator Wellpartner in 2017.

Walgreens mentioned the program in its 2020 annual financial filing, noting that changes to government pricing and regulations “could also significantly reduce our profitability.” Walgreens spokesperson Rebekah Pajak said that many of the company’s stores are in underserved areas and that it is proud to help fulfill the program’s goals. She declined to disclose the dispensing fees or terms of its contracts with hospitals and clinics.

Karyn Schwartz, vice president of policy and research at PhRMA, called the 340B program a “black box” and said drug companies would like more transparency because they “really have no way of knowing” how hospitals and pharmacies use their discounts.

Drugmakers said they continue to participate in the program by sending direct discounts to the hospitals but have eliminated some or all of the discounts passed through contract pharmacies because they didn’t trust the transactions, according to emails the companies sent to KHN and InvestigateTV. Novartis, which announced last year that it would sell drugs at a discount only for pharmacies within 40 miles of a hospital, said there is a “complete absence of transparency” in the contracts between hospitals and pharmacies.

“Contract pharmacy arrangements benefit for-profit pharmacies, third-party administrators, other middlemen and hospitals,” Novartis spokesperson Caryn Marshall wrote in an email.

“Lilly welcomes reforms where patients are identified as 340B eligible at the point-of-sale and share in discounts under the program,” said Tarsis Lopez, Eli Lilly spokesperson.

Getting By on ‘Half a Dose’

Meanwhile, as businesses wage war over profits, patients are stuck. Andrew Kosowski, a 75-year-old retired police officer with diabetes, was shocked last year when he lost access to discounted drugs from 340B.

Kosowski is a patient at UnityPoint Health in Peoria, Illinois, which uses funds from the program to supplement the prescription costs of low-income and Medicare patients. Under 340B, many of his prescriptions were $15 each.

Without the discount, Kosowski’s insulin and other drugs had cost more each month than his Social Security check delivered. “I wasn’t going to spend that kind of money,” he said. He took “half a dose to get me by.”

He recalled how his feet hurt and his mind was affected without his full prescriptions.

PhRMA’s Schwartz declined to speak to Kosowski’s crisis but said the industry participates in 340B and would like to see direct patient benefit. “We hope policymakers step in and really clarify the role that for-profit pharmacies are supposed to be playing in this program and ensure that patients benefit,” Schwartz said.

Kosowski was fortunate to have an ally in Anne Webster, a nurse practitioner at UnityPoint who guided him through months of filling out forms to eventually qualify for financial assistance directly from Novo Nordisk.

The assistance, though, does not cover medications from other companies that he had gotten at the 340B discount price — medications that had helped him better manage his diabetes.

Webster said pharma’s standoff came at the worst possible time: “A Type 2 diabetic is so high-risk for mortality from coronavirus. And they require more insulin if they are ill with the virus.”

Kosowski is not her only patient missing prescriptions.

“I think I prescribed over 2,000 prescriptions in one year to the 340B program for my patients who are underinsured, not insured and are financially challenged,” Webster said.

KHN data editor Holly Hacker contributed to this report.

InvestigateTV is Gray Television’s national investigative team and provides innovative, original journalism from a dedicated investigative team and partners. InvestigateTV is available on AppleTV, Roku, Amazon Fire, at InvestigateTV.com and across Gray broadcast and digital media properties. Gray Television, headquartered in Atlanta, is the largest owner of top-rated local television stations and digital assets in the United States. Upon its anticipated acquisition of the television stations of Meredith Corp., Gray will become the nation’s second-largest television broadcaster, with television stations serving 113 markets that reach approximately 36% of U.S. television households.

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Video Reporter: Caresse Jackman, InvestigateTV; Video Editor: Scotty Smith, InvestigateTV

When three teenagers died of fentanyl overdoses last year in Larimer County, Colorado, it shocked the community and “flipped families upside down,” said Tom Gonzales, the county’s public health director.

Several schools began stocking naloxone, a medication that reverses opioid overdoses. Community organizations trained teens to use it. But county and school officials wanted to do more.

That’s when they turned to opioid settlement funds — money coming from national deals with health care companies like Johnson & Johnson, AmerisourceBergen, and CVS, which were accused of fueling the epidemic via prescription painkillers. The companies are paying out more than $50 billion to state and local governments over 18 years.

Much of that money is slated for addiction treatment and efforts to reduce drug trafficking. But some is going to school-based prevention programs to reduce the possibility of addiction before it begins. In some cases, school districts, which filed their own lawsuits that became part of the national settlements, are . In other cases, state or local governments are setting aside part of their share for school-based initiatives.

Many parents, educators, and elected officials agree that investing in prevention is crucial to address the rising rates of , , and .

“We have to look at the root causes,” said , a senior scientist at the University of North Carolina-Chapel Hill and leading expert on applying prevention science to public policy. Otherwise, “we’re going to be chasing our tails forever.”

But the question of how to do that is fraught and will involve testing the comfort levels of many parents and local officials.

For generations of Americans, addiction prevention was synonymous with D.A.R.E., a curriculum developed in the 1980s and taught by police officers in schools. It “dared” kids to resist drugs and was used in concert with other popular campaigns at the time, like “just say no” and a in a frying pan with the narration, “This is your brain on drugs.”

But found those approaches . In some cases, suburban students their drug use after participating in the D.A.R.E. program.

In contrast, prevention programs that today’s leading experts say teach kids how to manage their emotions, communicate with others, be resilient, and build healthy relationships. They can have while also saving society $18 for every dollar invested, per a . But that approach is less intuitive than simply saying “no.”

If you tell parents, “‘We’re going to protect your child from dying of a fentanyl poisoning by teaching them social skills in third grade,’ they’re going to be angry at you,” said , who leads prevention-oriented research at the nonprofit Partnership to End Addiction. Selling them on the most effective approaches takes time.

That’s one of the reasons prevention experts worry that familiar programs like D.A.R.E. will be the go-to for elected officials and school administrators deciding how to use opioid settlement funds. When ºÚÁϳԹÏÍø News and InvestigateTV looked for evidence of local spending on prevention, even a cursory review found examples across half a dozen states where governments have already allocated $120,000 of settlement cash to D.A.R.E. programs. The curriculum has been revamped since the ’80s, but the effects of those changes are still being studied.

Budgeting Choices Reflect Deeper Debate

Researchers say putting money toward programs with uncertain outcomes — when more effective alternatives exist — could cost not only valuable resources but, ultimately, lives. Although $50 billion sounds like a lot, when compared with the toll of the epidemic, each penny must be spent efficiently.

“There’s tremendous potential for these funds to be wasted,” said , executive director of the Colorado State University Prevention Research Center.

But he has reason to be hopeful. Larimer County officials awarded Riggs’ team $400,000 of opioid settlement funds to build a prevention program based on the latest science.

Riggs and his colleagues are developing training for school staff and helping implement the , a widely for students at risk of depression. The program, which will start in 10 middle and high schools this fall, teaches students about resilience and builds social support through six small group sessions, each an hour long. It’s been shown in multiple studies to decrease rates of depression and drug use among youth.

Natalie Lin, a 17-year-old senior at Fossil Ridge High School in Fort Collins, Colorado, is optimistic the program will help overcome the stigma her peers face with mental illness and addiction.

“Having it in school” prevents people from feeling “called out” for needing help, said Lin, who carries naloxone in her car so she’s prepared to reverse someone’s overdose. “It’s just acknowledging that anyone here could be battling” addiction, and “if you are, that’s all right.”

Across the country, investments in prevention run the gamut. Rhode Island is using about $1.5 million of settlement cash to increase the number of in middle and high schools. Moore County, North Carolina, is on a mentoring program for at-risk youth. Some communities are inviting guest speakers and, of course, many are turning to D.A.R.E.

New Hanover County, North Carolina, and the city of Wilmington, which it encompasses, pooled $60,000 of settlement money to train nearly 70 officers in the D.A.R.E. program, which they hope to launch in dozens of schools this fall.

County commissioner Rob Zapple said it’s one piece of a “multiprong approach” to show young people they can lead productive lives without drugs. Officials are also putting $25,000 of settlement cash toward public service announcements and $20,000 toward other outreach.

They acknowledged there’s little research on the updated D.A.R.E. curriculum but said the county views its investment as a pilot, which they will track closely. “Instead of committing everything at once, we’re going to let the spending of the money grow with the success of the program,” Zapple said.

Munster, Indiana, also decided to , using $6,000 — a small slice of its total settlement funds — annually. Jasper County, Iowa, is to cover materials for the program’s graduation ceremonies for several years.

In some places, officials are frank that they’re not getting enough money to do anything inventive.

Solon, Ohio, for example, received $9,500 in settlement funds this year and is expecting similar or smaller amounts in the future. “While the funding is welcome,” finance director Matt Rubino wrote in an email, it’s “not material enough to be transformational” to the budget. Putting it all toward the existing D.A.R.E. program made the most sense, he said.

Out With the Scare Tactics

, CEO and president of D.A.R.E., said though the program has been in place since the ’80s, “it’s really significantly different” today. The curriculum was redone in 2009 to move away from scare tactics and lectures on specific drugs to focus instead on decision-making skills. Officers undergo intensive training, which includes understanding how children’s brains develop.

“Telling somebody a drug is harmful isn’t going to change their behaviors,” Pegueros said. “You really need to deliver a curriculum that’s going to build those skills to help them change behaviors.”

With the rise of fentanyl and some , interest in D.A.R.E. has grown in recent years, Pegueros said. He believes it can be effective as part of a comprehensive, community approach to prevention.

“You’re not going to find one curriculum, one program, one action that’s going to achieve the results you want,” he said.

Still, D.A.R.E. can play an important role, he said, pointing to a that found the new curriculum had a “positive effect in terms of deterring the onset of alcohol use and vaping” among fifth graders.

But many public health experts remain skeptical. They worry the changes are superficial. The few studies of D.A.R.E.’s new curriculum have been short-term, yielded , and in some cases had high dropout rates due to the covid-19 pandemic, which raises questions about how applicable the findings are for schools nationwide. According to some law enforcement officials and advocates, even the revamped program is often taught alongside campaigns like “,” which warns youth that trying drugs can be fatal the first time.

That type of scare tactic seems futile to , executive director of Think Kids, a nonprofit that advocates for children’s health and well-being in West Virginia. “It’s not as if these kids are unsuspecting and have never seen the consequences of drug use before,” she said.

In 2017, West Virginia in the nation of children living with their own or a parent’s opioid addiction.

“We need stronger communities that are willing to just give those kids more guidance and support than fear,” Caseman said. “They’ve already got enough fear as it is.”

Some local governments are trying to straddle both paths.

Take Chautauqua County in western New York. Last September, the county and a local child-development collaborative spent $26,000 — including — to bring former NBA player Chris Herren to about his past addictions to alcohol, heroin, and cocaine. Herren recounted to more than 1,500 students the first day he had a beer, at age 14; how addiction ended his career; and how he landed on the streets before entering recovery.

, a physical education teacher and the head of the that organized Herren’s visit, said the basketball player’s story resonated with students, many of whom have parents with addiction. “When he talks about selling his kid’s Xbox to get drugs, I think he’s touching on facts that they’ve had to go through,” Smeraldo said.

But a one-time speaker event has , researchers and public health experts say.

That’s why the county is also investing opioid settlement funds in several other initiatives, said Steve Kilburn, who oversees addiction-related grants for Chautauqua County. A likely six-figure sum will go to , a local nonprofit that teaches a nationally acclaimed “” curriculum in 23 schools and runs a “” program that provides one-on-one coaching and support for students found using drugs or carrying drug paraphernalia in school.

, executive director of Prevention Works, said some students are scared to come to school because their parents might overdose without someone at home to revive them.

Smeraldo, the physical education teacher, is planning to build on Herren’s talk with an after-school program, in which students will be able to discuss their mental health and transform interests like cooking into internships to help break the cycle of poverty that often contributes to addiction.

Herren is “the catalyst to get the kid to services that exist in the county,” Smeraldo said. It’s a starting point, not the end.

InvestigateTV is Gray Media Group’s national investigative team and provides innovative, original journalism from a dedicated investigative team and partners. InvestigateTV and its weekend and weekday programs are available on AppleTV, Roku, and Amazon Fire; at InvestigateTV.com; and across Gray’s 113 broadcast markets and digital media properties.

This <a target="_blank" href="/public-health/opioid-settlement-funds-addiction-prevention-dare-curriculum/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

In early July, as the covid-19 pandemic slammed rural America, the president of a small Kansas hospital sat down on a Friday afternoon and wrote the president of the United States to plead for help.

“I do not intend to add to your burden,” said Brian Williams, a retired Army lieutenant colonel and Desert Storm combat veteran. He said his hospital, Labette Health, was “like a war zone,” inundated with unvaccinated patients. A department head had threatened to resign, saying he could not “watch one more body be carried out.”

But Williams wasn’t seeking pandemic relief.

Instead, he asked President Joe Biden to confront pharmaceutical manufacturers Eli Lilly and Co., Novo Nordisk and others for refusing to honor a federal drug discount program for hospitals and clinics. The program gives Williams millions to pay staff members, ensure remote clinics remain open and provide charity care for patients unable to pay, he said.

“During a global pandemic, I think health care workers deserve a little bit more respect than to have resources taken away,” Williams said in an interview with KHN and InvestigateTV. “Every one of those [drug] companies, I looked them up, and they were not suffering tremendous [financial] losses, as hospitals were.”

Eli Lilly’s stock price increased nearly 40% and the company’s value rose by $59 billion in the first seven months of 2021. In the same period, Labette Health lost $1.2 million in revenue just from the missed savings on prescriptions, Williams said.

Lilly and other manufacturers, though, are holding their ground. They refuse to offer discounts to thousands of hospital-contracted pharmacies, saying the program has grown beyond its intended use and lacks federal checks and balances against duplicate discounts and other abuses. In lawsuits, they contend the billions in discounted sales they provide are rarely passed on to patients and instead are swallowed up by middlemen like contract pharmacies and third-party administrators.

Congress created the so-called 340B program in 1992 to provide extra funding for hospitals and clinics, especially those serving the poor and elderly. The purpose, lawmakers wrote, is to “stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

Companies that want their drugs covered by Medicaid or Medicare Part B are required to offer 340B discounts, typically 25% to 50% off what they might otherwise pay. Hospitals and clinics buy the drugs at the discount and then are reimbursed by an insurance company, Medicare or Medicaid at the higher negotiated rate. The difference is kept by the hospital or clinic to use as it sees fit.

The law does not require patients to benefit directly, a nuance that has fueled great conflict about how the program works and should be regulated.

The 340B program’s reach exploded after federal regulators ruled in 2010 that hospitals and clinics could contract with an unlimited number of retail pharmacies such as Walgreens and CVS, which are paid a fee to dispense the discounted drugs. The growth, coupled with long-held questions about regulatory authority, puts the program at a tipping point, with patients stuck in the middle, industry experts say.

The number of pharmacies contracted to work with 340B hospitals to dispense the discounted drugs has soared. It’s reached more than 31,000 nationwide this year from just over 1,700 in 2010, according to an analysis of federal data by InvestigateTV and KHN.

One eye-popping statistic: The drugs purchased under 340B climbed to $38 billion in 2020 from $5.3 billion in 2010, according to the Health Resources and Services Administration, or HRSA, which oversees the program.

Interests on both sides of the program — hospitals and drugmakers — say they are at the mercy of a program designed with the best of intentions, now run amok, hijacked by for-profit companies and wealthy hospitals trying to profit from its largesse.

Adam J. Fein, chief executive of the industry research organization Drug Channels Institute, estimates that nearly half the nation’s retail, mail and specialty pharmacies now profit from 340B: The program, he said, is “ the pharmacy industry.”

Legal fights about the program have landed before the U.S. Supreme Court, which is slated to hear arguments this month in . The hospital industry is challenging a 2018 rule by the Trump administration to cut reimbursement on certain 340B drugs by 28.5%. As Biden’s HHS secretary, Xavier Becerra has upheld the rule.

Most important, the administration says, is to make sure providers use the savings to benefit patients. In an interview with KHN and InvestigateTV, Rear Adm. Krista Pedley, director of the Office of Special Health Initiatives, which oversees the program within Becerra’s agency, said, “We need legislative changes to help make that happen and require that.”

‘Deeply Troubling’

When Sen. Joe Manchin (D-W.Va.) asked during a about pharmaceutical companies denying the discounts, Becerra said the drugmakers are violating the law.

“I hope what you’ll do is give us more authority” to regulate the program, Becerra said.

Manchin responded: “I really think we could do that in a bipartisan way, because I’ll tell ya, we’re all being affected.”

As California’s attorney general, Becerra led a coalition of national lawmakers federal government to hold the manufacturers accountable for their “deeply troubling” actions to undermine the program. At HHS, Becerra put the companies on notice.

Drugmakers — Lilly, AstraZeneca, Novo Nordisk, Sanofi, Novartis and United Therapeutics — took the matter to court, filing several lawsuits. This month, a federal judge ruled that the companies are not required to provide the discounts. A judge in Lilly’s case criticized the “unilateral” action by drugmakers but that the U.S. government’s effort to force them to honor the discounts was invalid.

Notably, U.S. District Court Judge Sarah Evans Barker in Indianapolis wrote that manufacturers believe they are “at the mercy of a system run amok” and that the program “can no longer be held together and implemented fairly” solely through the agency’s guidance and inconsistent messaging.

Becerra requested $17 million annually for 340B program oversight, a $7 million bump. The money would establish a dispute review panel and increase the audits the agency does on manufacturers as well as the providers.

Williams — at his small hospital in rural Parsons, Kansas — said the nearly $4.3 million the hospital gains each year from 340B has allowed him to add a full-time position for case management, increase staffing hours, develop after-school programs and open clinics in impoverished towns that lacked health care.

The hospital has about 20 pharmacies under active contracts, according to the federal database. Williams said it includes locally owned shops like Bowen Pharmacy as well as corporate giants like Walgreens and Walmart, sites that are convenient for patients. A pharmacy added in 2019 is in Frisco, Texas — a mail-order facility that ships specialty drugs directly to patients’ homes.

Patients, Williams said, directly benefit from the federal program: “I’d love to have the CEO of Eli Lilly come here and I’ll take him around and I’ll show him a town of 1,200 where 40% of the population live below the poverty level.”

“Some of our patients come there on a bicycle or in a wheelchair,” Williams said. “I can go 30 minutes in any direction and find pretty tough people living in pretty … pretty austere circumstances.”

One Hospital, 300 Pharmacies

Vanderbilt University Medical Center, based in Nashville, has added three regional hospitals, clinics and providers in recent years — growth that has fueled its rise in contract pharmacies from zero in 2010 to 300 this year. The pharmacies, which reach across Tennessee and all the way to California, “in each instance serve VUMC patients,” Vanderbilt spokesperson John Howser said.

Financial filings do not disclose how much Vanderbilt gains annually from the 340B program, and Howser declined to disclose the amount. The medical system’s operating revenue grew $649 million, or 13%, to $5.5 billion in fiscal year 2021 compared with 2020, according to its latest financial disclosure. Its operating profit rose 25% to $177 million in 2021 compared with 2020.

According to an amicus brief filed in March for the American Hospital Association v. Becerra case, Vanderbilt spends more than $500 million annually on community benefits, such as charity care. Revenue from the 340B program supports low-income programs including medication assistance, home infusion medications and a pharmacy program at a health clinic run by students.

In the brief, Vanderbilt states the government’s cut in Medicare reimbursement has cost the system $12.4 million in 340B savings and will “impact VUMC’s ability to continue to fund community benefit programs at historic levels.”

Large regional health systems have been particularly active in expanding their contract pharmacy networks. The top three — University of Michigan Hospitals and Health Centers, Cambridge Public Health Commission in Massachusetts and Henry Ford Hospital in Detroit — had zero contracts with outside pharmacies in 2010, and each now has more than 500.

InvestigateTV and KHN contacted the 10 providers with the most contract pharmacies and asked why they saw such growth, how much revenue 340B generates and how the money was used.

While some said the money went for charity care and community programs, others did not respond.

Why not require hospitals to report precisely how they use the savings to benefit patients?

It would be “burdensome,” said Maureen Testoni, chief executive of 340B Health, which represents health systems.

She said her organization does not support mandating new reporting for nonprofit hospitals, which are required to submit annual cost reports and tax filings. The advocacy group has funded research that shows the savings from discounts go to patients. Hospitals enrolled in the program are much more likely to provide free care and specialty services, such as transportation, that are “typically not the ones you can use to pad your pockets,” she said.

Testoni said program growth is good because it means more care can be provided in outpatient settings and by safety-net providers for low-income populations. The bigger sales numbers, she said, could stem from more prescriptions or from higher drug prices. Detailed information about either metric is not public.

“Are we concerned that somehow pharmaceutical companies are being hurt by this?” Testoni said. “Because I’ve never seen any evidence of that in terms of their revenue going down or them having trouble keeping their doors open.”

‘Essentially Taking Over’

Hospitals aren’t required to prove that the large pharmacy networks serve uninsured or needy patients. The larger networks enrich the hospitals and the pharmacies, said Fein of Drug Channels.

A 2018 Government Accountability Office found that a hospital or clinic generally pays a flat dispensing fee — typically from $6 to $15 — for each eligible prescription a pharmacy processed. And pharmacies can contract with multiple health care providers: One Walmart central fill facility in Spring, Texas, contracted with 1,842 340B hospitals and clinics, the InvestigateTV and KHN analysis found.

Recent securities filings for Walmart, Walgreens and CVS Health — the biggest players in the contract pharmacy market —- do not provide line-item detail on how many 340B prescriptions are processed or the revenue those transactions generate. Walmart did not respond to requests for comment. CVS declined to comment.

CVS in an August financial filing that operating income increased by a third between March and June compared with a year ago and noted that 340B business contributed to that increase but provided no further detail. The company acquired 340B contract pharmacy administrator Wellpartner in 2017.

Walgreens mentioned the program in its 2020 annual financial filing, noting that changes to government pricing and regulations “could also significantly reduce our profitability.” Walgreens spokesperson Rebekah Pajak said that many of the company’s stores are in underserved areas and that it is proud to help fulfill the program’s goals. She declined to disclose the dispensing fees or terms of its contracts with hospitals and clinics.

Karyn Schwartz, vice president of policy and research at PhRMA, called the 340B program a “black box” and said drug companies would like more transparency because they “really have no way of knowing” how hospitals and pharmacies use their discounts.

Drugmakers said they continue to participate in the program by sending direct discounts to the hospitals but have eliminated some or all of the discounts passed through contract pharmacies because they didn’t trust the transactions, according to emails the companies sent to KHN and InvestigateTV. Novartis, which announced last year that it would sell drugs at a discount only for pharmacies within 40 miles of a hospital, said there is a “complete absence of transparency” in the contracts between hospitals and pharmacies.

“Contract pharmacy arrangements benefit for-profit pharmacies, third-party administrators, other middlemen and hospitals,” Novartis spokesperson Caryn Marshall wrote in an email.

“Lilly welcomes reforms where patients are identified as 340B eligible at the point-of-sale and share in discounts under the program,” said Tarsis Lopez, Eli Lilly spokesperson.

Getting By on ‘Half a Dose’

Meanwhile, as businesses wage war over profits, patients are stuck. Andrew Kosowski, a 75-year-old retired police officer with diabetes, was shocked last year when he lost access to discounted drugs from 340B.

Kosowski is a patient at UnityPoint Health in Peoria, Illinois, which uses funds from the program to supplement the prescription costs of low-income and Medicare patients. Under 340B, many of his prescriptions were $15 each.

Without the discount, Kosowski’s insulin and other drugs had cost more each month than his Social Security check delivered. “I wasn’t going to spend that kind of money,” he said. He took “half a dose to get me by.”

He recalled how his feet hurt and his mind was affected without his full prescriptions.

PhRMA’s Schwartz declined to speak to Kosowski’s crisis but said the industry participates in 340B and would like to see direct patient benefit. “We hope policymakers step in and really clarify the role that for-profit pharmacies are supposed to be playing in this program and ensure that patients benefit,” Schwartz said.

Kosowski was fortunate to have an ally in Anne Webster, a nurse practitioner at UnityPoint who guided him through months of filling out forms to eventually qualify for financial assistance directly from Novo Nordisk.

The assistance, though, does not cover medications from other companies that he had gotten at the 340B discount price — medications that had helped him better manage his diabetes.

Webster said pharma’s standoff came at the worst possible time: “A Type 2 diabetic is so high-risk for mortality from coronavirus. And they require more insulin if they are ill with the virus.”

Kosowski is not her only patient missing prescriptions.

“I think I prescribed over 2,000 prescriptions in one year to the 340B program for my patients who are underinsured, not insured and are financially challenged,” Webster said.

KHN data editor Holly Hacker contributed to this report.

InvestigateTV is Gray Television’s national investigative team and provides innovative, original journalism from a dedicated investigative team and partners. InvestigateTV is available on AppleTV, Roku, Amazon Fire, at InvestigateTV.com and across Gray broadcast and digital media properties. Gray Television, headquartered in Atlanta, is the largest owner of top-rated local television stations and digital assets in the United States. Upon its anticipated acquisition of the television stations of Meredith Corp., Gray will become the nation’s second-largest television broadcaster, with television stations serving 113 markets that reach approximately 36% of U.S. television households.

This <a target="_blank" href="/aging/340b-big-pharma-hospitals-battle-over-drug-discounts-patients-miss-out-on-millions-in-benefits/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">