At the May 2025 UC Regents meeting, UC Health leaders delivered a compelling update on the federal 340B Drug Pricing Program. Highlighting its impact on equity, access, and financial sustainability, they underscored how 340B savings enable essential care and community benefit across California’s most vulnerable populations.

Dr. Cedric Terrell, Chief Pharmacy Officer for UC Health, and Amar Sharma, Manager of the 340B Program, presented a strategic update to the UC Regents in May 2025, emphasizing the 340B Drug Pricing Program’s vital role in promoting health equity and sustaining safety-net services. Established by Congress in 1992, the 340B program requires drug manufacturers to provide discounted outpatient medications to eligible healthcare entities, enabling them to stretch scarce resources and enhance care for underserved populations.

UC Health currently operates 18 covered entities under the 340B umbrella, including Disproportionate Share Hospitals, Federally Qualified Health Centers, and Hemophilia Treatment Centers. In fiscal year 2024 alone, the program delivered more than $1.3 billion in systemwide savings. These funds were reinvested in free and low-cost medication programs, access to high-cost specialty therapies, patient financial assistance, and expanded services in high-need communities.

Beyond these immediate outcomes, 340B savings underpin UC Health’s broader mission of community impact. In FY2022–23, UC Health provided over $5.3 billion in community benefit, including $2.0 billion in Medi-Cal and safety-net investments, $2.4 billion in uncompensated Medicare care, and $881 million in faculty professional care.

Dr. Terrell stressed that the 340B program is far more than a budgetary advantage; it is a mission-critical resource. Without it, UC Health’s ability to offer equitable, patient-centered care would be significantly compromised.

The UC Health Systemwide Early Commitment (SWEC) program has decreased the number of PGY1 pharmacy residents leaving UC for outside PGY2 positions by 65%!

In 2023, the ASHP Accreditation Services Office (ASO) updated the early commitment process for pharmacy residency programs, specifically to benefit health systems that offer both PGY1 and PGY2 programs. The revised process enabled these systems to allow PGY1 residents to commit early to one of their own PGY2 residencies, enhancing internal recruitment and streamlining advancement opportunities.

The UC Health Residency PCT took the initiative to create a formal UC Systemwide Early Commitment (SWEC) process. To ensure consistency and fairness, all UC residency programs collaborated to construct an early commitment policy and procedure to be used for recruitment during the 2024-2025 residency year. Formal application pathways, townhalls, and trainings were held for residency program directors and pharmacy residents.

Formally, the goal of UC SWEC was to reduce PGY2 resident "leakage"—or the rate at which PGY1 residents leave the system to pursue PGY2 programs elsewhere. The results of the first year of UC SWEC were overwhelmingly positive, with a 65% reduction in PGY1 residents leaving UC for outside PGY2 positions. The updated early commitment framework not only aligns with ASHP accreditation requirements but also supports long-term workforce planning and talent development. By retaining more residents for PGY2 training, organizations can better ensure workforce continuity, reduce recruitment costs, and foster a more cohesive learning environment.

For the upcoming year, slight changes have been made to the UC SWEC policy and procedure including a 1-stage UC SWEC process. The updated policy and procedure can be found here: UC-SWEC PGY2 Early Commitment Candidate Selection Policy and Procedure 2025 to 2026 (1).pdf. Please be on the lookout for more information soon!

UC Pharmacy Conference brings together residents, preceptors and pharmacy leaders for great food, wonderful company and valuable learning opportunities.

We are thrilled to share highlights from our recent UC Pharmacy Conference, an inspiring gathering that brought together residents, pharmacy staff, and leaders from across our UC community.  Meeting in person after months of virtual interaction added a unique richness to the experience, especially for our residents who were able to share their year-long projects with each other and their leaders.  With the support of over 48 vendors to network with our system-wide leaders and discuss new and continuing partnership opportunities.  Additionally, 12 hours of continuing education and over 100 resident presentations were presented at the meeting.  The spirit of collaboration that infused every session and conversation made conference truly special. It was a joy to witness individuals from diverse roles coming together to share knowledge, explore innovative ideas, and support one another’s growth in pharmacy. The energy in the room was palpable as we learned through our Innovative Partner presentations on revenue cycle optimizers, medication education, and prior authorization support. These presentations focused on vendor collaboration with our sites can lead to operational, clinical, and financial efficiency. There were also three wonderful panels in the areas of Cell and Gene Therapy, AI, and Strategic Partnerships that drew large crowds.  Pharmacy Collaborative Teams were also onsite and able to have both informal hallway chats or formal meetings to work through big, wicked problems in their area of expertise.

We are especially grateful to everyone who contributed their own time, insights and enthusiasm to the conference.  Thank you to our excellent speakers, our moderators, and residents for the great presentations.  Thank you to our Specialty and Purchasing Leaders and our Pharmacy Chiefs for supporting our Reverse Showcase. And thank you to planning team team who helped to pull this conference off without a hitch.

Conference presentations are available on the UC Pharmacy Conference page on this website (https://uchealthpharmacy.org/ucpc).

As we return to our daily work, let’s carry forward the momentum and inspiration sparked during the conference, and continue our journey towards One UC Pharmacy.  Save the Date for next year’s conference at the Hayes Mansion in San Jose May 14-15, 2026.

The UC Specialty Pharmacies aim to focus on rare disease initiatives in the upcoming fiscal year.

Over 30 million Americans are living with rare diseases, spanning more than 7,000 unique conditions. Patients with rare diseases are often under or misdiagnosed, which can lead to years of triage from one provider to the next without definitive diagnosis. Diagnostic delay in rare diseases is a problem which has an impact on the lives, not only of the affected persons and their families, but also of society as a whole. Most of these diseases have no standardized treatment guidelines or FDA-approved therapies, posing significant challenges across the healthcare system- especially within pharmacy practice. Health system specialty pharmacies (HSSPs), specifically the UC Specialty Pharmacies, are uniquely positioned within integrated delivery networks to advance healthcare access to patients with rare diseases.  The UC Specialty Pharmacies are designed to handle the high-touch, high-cost, and high-complexity nature of rare disease management. Our UC pharmacists are leading and expanding specialty pharmacy programs specifically tailored to the rare disease population. The UC Specialty Pharmacies can enhance medication access, coordinate multidisciplinary care, manage adverse events, ensure adherence, and support patient education. In FY25, the UC specialty pharmacies had significant success in obtaining access to dispense products in the rare disease space including, but not limited to, drugs for hypertrophic cardiomyopathy (HCM), primary biliary cholangitis (PBC), and tenosynovial giant cell tumor (TGCT). In FY26, the UC Specialty Pharmacies will be involved in expanding their rare disease programs, continuing to service more rare disease patients, working on systemwide projects in rare disease patient identification, and showing the value that health system specialty pharmacies bring to management of rare disease patients.

While we are sad to him go, we want to congraulation Sean Lavigne on his new position at UC Davis Health!

Domestic Policy: Article “Tariff Trouble: Trump's Prescription for Pharma Supply Chain Headaches”

President Donald Trump's executive order on pharmaceutical tariffs, dated May 12, 2025, aims to boost domestic production and reduce drug prices in the U.S. However, it has significant implications for the global supply chain and conflicts with foreign pharmacy benefits schemes like Australia's Pharmaceutical Benefits Scheme (PBS).

The order imposes 25% tariffs on APIs from China and 20% from India, raising production costs for U.S. drug manufacturers. Tariffs on medical packaging and laboratory equipment will disrupt drug release timelines, particularly for biologics and temperature-sensitive therapies. Generic drug manufacturers, such as Teva and Mylan, will be heavily impacted, facing substantial cost escalations.

These tariffs could worsen existing drug shortages, especially in the generic sector, and may lead manufacturers to seek alternative markets or reduce production. The pharmaceutical industry, highly globalized, could face significant delays in drug production and distribution. Narcotics, essential for pain management, are already experiencing supply chain disruptions, which tariffs could exacerbate.

Trump's order includes a "most favored nation" policy, tying U.S. drug prices to those negotiated by other countries, aiming to reduce U.S. drug prices by up to 90%. This policy conflicts with schemes like Australia's PBS, potentially leading to higher prices in foreign markets and undermining their ability to provide affordable medications.

The tariffs could lead to higher production costs, passed on to consumers, and exacerbate drug shortages. Conversely, the "most favored nation" policy could reduce U.S. drug prices, incentivize domestic manufacturing, and enhance market competition. The executive order's impact on the U.S. drug market remains uncertain, potentially being either a "bitter pill" or a "miracle cure."

The 340B Drug Pricing Program is under intense scrutiny as recent federal actions and pharmaceutical policies threaten its future. With millions in savings at stake for UC safety-net hospitals, stakeholders must navigate a rapidly evolving landscape. Discover the latest developments and their potential impact on healthcare providers.

Presidential Executive Order Proposes Significant 340B Reforms

On April 15, 2025, President Trump issued an executive order directing the Department of Health and Human Services (HHS) to implement substantial changes to the 340B Drug Pricing Program. Key proposals include adjusting Medicare payments to reflect hospitals' actual acquisition costs for medications and mandating that federally qualified health centers provide insulin at or below their 340B acquisition cost.

Pharmaceutical Manufacturers Modify 340B Contract Pharmacy Policies

In recent months, several drug manufacturers have announced changes to their 340B contract pharmacy policies. For instance, Biogen updated its policy effective April 10, 2025, requiring data submission via 340B ESP and exempting certain states from restrictions. Similarly, Pfizer implemented policy changes affecting Utah 340B hospital covered entities, effective May 7, 2025.

Legal Developments: Hospitals Await HHS Guidance Post-Court Ruling

Following a favorable court ruling for hospitals regarding 340B rebate models, stakeholders are awaiting further guidance from HHS. In a May 2, 2025, filing, the government indicated that it is evaluating options and expects to provide guidance within thirty days.

Focus on cost savings initiatives ramp up on employee plans for 2026 as news breaks that overall spend continued to go up over 8% in 2024.  Focus areas with the greatest impact for savings include:  network changes, maximizer programs and medical drug cost controls

80% of employee plans are worried about the rising cost of specialty drugs on both the medical and pharmacy side.  This rising cost on specialty drugs has accounted for over half of the total drug spend in many plans.  With price increases, inflation and potential tariffs, the average drug cost is expected to rise 11% or more for 2026.  Due to this rising cost plans are looking a new and old ways to control the higher costs that they face.  Programs expected to be evaluated for implementation in 2026 to help control costs include:

·        Medical formularies-   72% of plans are expected to have one for 2026

·        Medical Rebates- 56% of plans expect to start collecting drug rebates on the medical side

·        Site of Care Mandates-  1 in 3 plans expect to add new site of care mandates

·        Copay Maximizers-  17% of plan sponsors plan to implement this program

The implementation of these programs can have significant impact on the cost of a plan.  A maximizer alone can save a 100K person plan with 50% specialty utilization over $18M in drug costs alone while medical rebates can add up to an additional $8-$10M in rebate value. 

Site of Care programs are expected to be the most controversial of programs that will be implemented going forward. The expectation is that the use of white bagging will continue to be a subject that many plans and employer groups look at as a way to really drive the cost down.

The UC employee plans are looking into each of these items for 2026 and a decision will be made later in the year on which, if any get implemented.