Heritage Health and Housing, Inc. and Evergreen Health (Evergreen) filed the suit in New York County State Supreme Court on Friday, March 24 on behalf of the patients who depend upon 340B for needed health care services.

Heritage operates a federally qualified health center (FQHC) in Harlem that provides health care and medications to more than 5,500 patients. Evergreen is an FQHC “look-alike” in Buffalo serving more than 24,000 patients. Heritage and Evergreen are two of many providers who form New York’s healthcare safety-net, providing critical care services to nearly 2.3 million New Yorkers, of whom 71 percent are persons of color, and 89 percent are classified as low-income.

The main source of funding for Heritage and Evergreen is the federal drug pricing program called 340B.

According to an article by Business First of Buffalo, Evergreen Health could see $13 million in annual losses to its $117 million budget. Another local federally qualified health center, The Chautauqua Center, said they would lose $2 million in the carve out. Statewide, health centers are estimated to lose $250 million due to the changes set to go into effect by New York State on April 1, 2023

A report released by the NY Health Plan Association estimates the change will actually increase annual New York State-specific expenditures, costing taxpayers more than $235 million annually. Between the $250 million cut from safety-net providers and the cost to taxpayers, the 340B “carve-out” will have a near $500 million dollar negative impact.