A 340B Contract Pharmacy is a retail entity that provides prescription drugs to patients of 340B-eligible covered entities under the 340B Drug Discount Program. To determine if your health system is 340B-eligible, visit the HRSA.gov site, or click here for our post — “Understanding The 340B Program Requirements.”

According to a Fact Sheet by the American Hospital Association (AHA.org), “In order to expand the reach of the 340B program, the Health Resources and Services Administration (HRSA) allows 340B participants (also known as “covered entities”) to contract with outside pharmacies to dispense drugs to eligible patients. Contract pharmacies serve as an extension of the 340B provider and provide patients access to prescription drugs outside of the four walls of the hospital or community clinic.”

Covered entities choose contract pharmacies to dispense 340B drugs to patients for a number of reasons. Many hospitals, for instance, prefer their in-house or on-campus retail pharmacies to be operated independently. Some hospitals reach 340B contract pharmacy agreements with multiple pharmacies in their communities, offering their patients more convenience, access and options when filling prescriptions written by their providers.

Since the 340B program was developed to help low-margin, negative-margin and non-profit healthcare entities fill revenue gaps common to their business models, contract pharmacies should never cost a health system more in fees and charges than they generate in prescription savings.

What are the requirements for becoming a 340B contract pharmacy?

In order to become a 340B contract pharmacy, eligible to dispense drugs on a covered entity’s behalf, a pharmacy must register for the 340B Program, and be listed on the 340B Office of Pharmacy Affairs Information System (OPAIS). Moreover, 340B contract pharmacies must not use 340B drugs for Medicaid patients unless the covered entity has an arrangement in place with the state Medicaid agency to prevent duplicate discounts.

At the same time, covered entities are responsible for ensuring compliance of their contract pharmacy arrangement(s) with all 340B Program requirements. 340B contract pharmacies must be approved by the Office of Pharmacy Affairs (and listed on the 340B OPAIS) before participating in the 340B Program.

How do I register contract pharmacies to serve my entity’s patients?

First, it’s important to remember that covered entities may register 340B contract pharmacy arrangements ONLY during open registration periods, and ONLY after written contracts with the pharmacies are in place.


   —October 1-15
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340B Registration process (In House)

1) First, you’ll need to set up the covered entity’s Authorizing Official (AO) and Primary Contact (PC) account in the 340B OPAIS.
2) Next, review the 340B OPAIS User Guide for Contract Pharmacies. (NOTE: In order to review the User Guide, you’ll need to log into the 340B OPAIS).
3) Then, you must register the contract pharmacy online. (Again, to register a 340B contract pharmacy online, you’ll need to log into the 340B OPAIS).
4) Finally, you’ll need to coordinate the registration of your 340B contract pharmacy.

If your PC creates the registration, your AO will receive emails instructing them to authorize your contract pharmacy registrations, and submit to them HRSA. Your AO must complete this step within 15 calendar days after submitting your online registration request. Otherwise, the request will be canceled, and you’ll have to wait until the next open registration period to register the contract pharmacy.

Important registration tips to remember:

  • Registrations must be completed in single sessions. Incomplete registrations cannot be saved for later submission.
  • Only AOs and PCs can register contract pharmacies.
  • You’ll need to know each pharmacy’s Drug Enforcement Agency number and its physical address before beginning the registration process.
  • If your 340B contract pharmacy is changing ownership, contact the Prime Vendor Program (PVP) for assistance in ensuring a smooth transition.
  • The PVP can answer many of the questions you may have about preparing for registration. It can also offer you assistance during the registration process.
  • You’ll need to verify that your 340B OPAIS records reflect the most current information about the contract pharmacy. (As a covered entity, it’s your responsibility to ensure that your 340B OPAIS information is current at all times).
  • If there are changes to your any of your contract pharmacy arrangements, notify HRSA immediately.

340B Registration process (ProxsysRx)

First, if your health system is 340B eligible, ProxsysRx can build, register and manage (entirely at our own expense) an in-house or on-campus 340B contract pharmacy.

If you’d like register multiple contract pharmacies in your community, offering your patients more convenience, access and choice, ProxsysRx will work with you to identify the best prospective 340B contract pharmacy partners, then manage the registration process turn-key.

Our standard for 340B contract pharmacies

As we stated earlier, contract pharmacies should never cost your health system more in fees and charges than they generate for you in prescription savings. It’s the standard we hold ourselves to, and the standard we’ll expect all of your 340B contract pharmacies to uphold.

Any contract pharmacies unwilling to meet that standard shouldn’t be in your network. Simple as that.

340B Audit Requirements

In order to fulfill the ongoing obligation of 340B compliance, your health system is required to provide oversight of all contract pharmacies and maintain auditable records. You’re also expected to conduct annual audits of your contract pharmacies, completed by an independent auditing firm.

Once again, when you authorize ProxsysRx to manage and/or oversee your contract pharmacy agreements, we’ll provide you with full support in maintaining auditable records and conducting annual audits.

ProxsysRx is here to help, if you have questions.

There are so many ways ProxsysRx can help your health system unlock pharmacy’s potential — for better outcomes, and better incomes. To learn more, contact Howard Hall. C: 214.808.2700 | howard.hall@proxsysrx.com