RWDSU Joins Growing Opposition To Department Of Health’s Medicaid Drug Carve-Out

March 10, 2021

The Retail, Wholesale, and Department Store Union (RWDSU) today joined the Save NY’s Safety Net coalition to call on the Department of Health to repeal the disastrous Medicaid drug carve-out.

The state’s plan to “carve-out” Medicaid prescription drugs will devastate 340B drug discount program providers including community health centers, hospitals, and HIV care management organizations.

The 340B program allows safety net providers to purchase deeply discounted drugs and use the savings to provide essential services from housing aid to food assistance for low-income New Yorkers.

Albany’s plan is scheduled to take effect on May 1, 2021, and will cause widespread and disastrous consequences statewide.

“Today we join thousands of New Yorkers to tell DOH: no cuts and no changes to the Medicaid pharmacy benefit. In the middle of this deadly pandemic, the last thing New Yorkers need is funding cuts to essential healthcare services that protect our communities. As the union representing workers at Housing Works, we know that we need more investments in healthcare – not less,” said Stuart Appelbaum, President RWDSU.

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Community health groups are also warning that the loss of 340B revenue will jeopardize the financial stability of safety-net providers like Federally Qualified Health Centers (FQHCs) and HIV care management organizations.

The threat of the impending carve-out is already limiting provider access to financing and capital at a time when revenues have decreased drastically because of the pandemic.

There is widespread opposition to the changes and widespread agreement on the horrendous effects that will result if the changes are not reversed.

So far:

  • Over forty state lawmakers sent a letter to Governor Cuomo urging DOH to repeal the Medicaid drug carve-out
  • Editorial boards have also voiced their opposition
  • Six hospital groups representing facilities across the state have written to the Department of Health saying, “If allowed to stand, this massive policy and operational shift will jeopardize the solvency of critical healthcare services and programs for vulnerable and low-income populations…”
  • Over 100 community-based healthcare and support groups have written to the Department of Health saying, “This new policy will provide little to no benefit to the state and will devastate patients and the safety net providers they rely on for care.” Read it here.
  • A report by Menges Group found that the results of the change will have drastic effects on communities and will actually cost the state over a $1 billion over the next 5 years.

For more information on the coalition and the campaign, visit

Save New York’s Safety Net: 340B Saves Lives is a statewide coalition of community health clinics and community-based organizations that is committed to serving vulnerable New Yorkers across the state, ending the epidemic, and saving the 340B drug discount program.

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