A federal drug discount program authorized under section 340B of the Public Health Service Act. The 340B program requires drug manufacturers to enter into pharmaceutical pricing agreements (PPAs) with the Secretary of HHS as a condition of Medicaid and/or the Medicare Part B program covering and paying for the manufacturer’s covered outpatient drugs. The PPAs specify, among other things, that manufacturers may not sell covered outpatient drugs above 340B ceiling prices to covered entities.
The direct beneficiaries of the discounted drugs provided by the program are particular hospitals and clinics who serve patients that might not otherwise receive care. These include “disproportionate share” hospitals who serve a high percentage of indigent patients, critical access hospitals, and cancer clinics.
An eligible covered entity is allowed to purchase drugs at typical discounts of 40% off their normal price for all drugs that are provided to outpatients of the entity, whether or not those particular patients are able to afford their medications.
The purpose of the program is to “enable [covered] entities to stretch scarce federal resources, reaching more eligible patients and providing more comprehensive services.” The covered entities are allowed to use the benefit of these substantial savings in any way they choose. There is no requirement to pass the savings on to patients directly.
In order for an eligible entity to purchase a drug at a 340B discount, it must dispense that drug to the patient. A large number of outpatients fill their prescriptions at independent and chain pharmacies that are unaffiliated with the hospital. The 340B regulations also allow a covered entity to contract with a pharmacy to distribute the covered entity’s drugs on the hospital’s behalf. This allows the hospital to increase the percentage of patients for whom it can capture 340B savings.
Yes. Covered entities have a huge opportunity to increase their participation in the program by establishing a contract with one or more pharmacies, and they typically offer a per-prescription dispense fee to induce retail pharmacies to participate.
No. The hospital makes money through the savings on its drug purchases, and the hospital pays all the fees associated with the management of the program as well as the cost of the replacement inventory.
Your pharmacy processes prescriptions just as it does without the 340B program. 340Best captures data on your pharmacy’s prescription dispenses from the switch and matches them with the covered entity’s lists of patients and doctors. When your pharmacy has dispensed an orderable quantity of a drug, the hospital will provide you a replacement of that drug (paid for by the entity) in turn the entity will get the patient co-pay that you’ve collected as well a the third party you would normally bill to insurance.
No, you are not required to keep a separate physical inventory. 340Best Contract Pharmacy does the work of managing how many drugs have been dispensed on behalf of the hospital.
The covered entity will create a new account for themselves at your current wholesaler. 340Best will order drugs on this account to be delivered directly to you, along with your normal delivery.
The one change to your inventory management is that you will be receiving drugs from the wholesaler that you didn’t order yourself. 340Best provides regular reports that tell you how many dispenses you’ve made that are 340B-eligible on behalf of your contracted covered entity. This report provides you information regarding how soon you can expect an order of replacement drugs. You may delay your normal purchase of that drug, do nothing and carry an extra unit of that drug until you’ve dispensed it, or return the bottle from the hospital to your regular wholesaler account per your wholesaler’s policies.
If you use the 11-digit NDC when entering a dispense into your pharmacy information system, you will receive the same size bottle from which you dispensed.
ContractRx doesn’t generate any invoices until an entire orderable unit has been dispensed on behalf of the covered entity. That means that you will never owe on pharmaceuticals for which you haven’t already collected patient co-pays and received authorizations for third-party reimbursements. At the end of each monthly or semi-monthly period, the covered entity will generate a net-30 invoice to you for the drugs they’ve had delivered to you, less your negotiated fees.
Any rebates you are currently getting from your wholesaler will not apply to drugs ordered on the hospital’s account. The reimbursement price you pay to the hospital for drugs dispensed as 340B will be your base price with your wholesaler, not your net price after rebates.
No. The key requirement for participation in the 340B program is to be a qualified covered entity. There are no categories of eligibility under which a pharmacy can participate.
Implementation times can vary based on a number of factors, however we’re typically able to implement contract pharmacies within six weeks for 340B Administration.