The 340B-program landscape has changed dramatically.

For the 340B program’s first 28 years after its 1992 inception, the basic list of Best Practices for eligible entities (the 340B basics, if you will) remained largely unchanged — aside from the dramatically-increased importance of using specialized software. But since the June, 2020 introduction of 340B ESP — which has led to an avalanche of ever stricter (and patently unlawful) manufacturer restrictions — the demands placed on 340B-eligible entities have changed so profoundly, we’ve divided this article into two halves.

While the time-honored best practices are still important, the challenges of overcoming drug manufacturers’ 340B restrictions has all-but obliterated the 340B savings and revenue generated by health systems lacking the necessary resources and know-how.

PART ONE: 340B Program Basics

Understand patient eligibility, and who qualifies for 340B

In order to qualify for 340B-eligible prescriptions, patients must first meet a few basic qualifications. They must have:

  • Already received health care services (other than medications) from your health system


  • Received health care services from one or more professionals who are employed by, contracted with, or are under other arrangements with your health system


  • Received health care services from one or more professionals under your responsibility (IE: Providers serving your patients by referral)

Know which 340B drugs are eligible AND worth claiming for discounts

To qualify for 340B program discounts, a drug / prescription must be:

  • A 340B participating drug
  • Filled at one of your health system’s registered 340B contract pharmacies

NOTE: Not all 340B-eligible prescription drugs are worth claiming 340B discounts — for the simple reason that the time-and-effort costs involved outweigh the savings.

For more information on which drugs are 340B eligible, Click Here.

Do not attempt to manage your 340B program without specialized software

As we mentioned in a previous post, “340B programs cover thousands of discounted drugs, and, for most eligible entities, thousands — if not tens of thousands — of 340B-eligible prescriptions annually. Without specialized software solutions, the average 340B-eligible health system would likely need a dozen (or more) full-time employees, just to monitor their prescriptions to maximize savings and revenue.”

Dispense as many 340B prescriptions as possible through your in-house retail pharmacy

Properly integrated into your hospital’s overall continuum of care, an on-campus retail pharmacy should afford you the best possible usage of your 340B savings.

One critical component of properly-integrating your retail pharmacy into that continuum is…

Managing a well-run bedside prescription delivery program

It’s one of the bedrock 340B basics. A well-managed bedside prescription delivery program is the first step in ensuring that your patients follow their medication protocols after they’ve left your care.

Too many 340B-eligible health systems believe they can’t afford the staff needed to administer them. ProxsysRx owns and/or manages retail pharmacies with Meds To Beds programs across the country — and without exception, the additional revenue they generate far outweighs the programs’ costs. And besides, at the pharmacies we own outright, ProxsysRx absorbs all the programs’ costs.

At one Mississippi health system with an on-campus ProxsysRx pharmacy, our staff filled over 18,000 discharge prescriptions in just the first 12 months alone. During that time, we increased the hospital’s pharmacy revenues by 125%. At the same time, the hospital’s readmissions were reduced by 79%. That’s an example of transforming a health system with good, simple 340B basics.

To learn more about how to organize and manage an effective Meds To Beds program, Click Here.

Optimize your 340B contract pharmacy network

The more contract pharmacies you have in your 340B network, the more choices and convenience you offer your outpatients in filling their prescriptions. However, many contract pharmacies cost hospitals more in fees than they generate in 340B savings and revenue. One of the key efforts ProxsysRx undertakes, when onboarding the hospitals whose 340B programs we manage and support, is a thorough analysis of the contract pharmacies in their existing networks — replacing pharmacies generating low 340B match rates, with nearby pharmacies that have much higher match rates.

Always double-check your TPAs for potential 340B data mismatches

There are so many factors causing TPA data mismatches in 340B entries, some as simple as Dates Of Birth entered differently in two separate places. Moreover, the more complex your health system’s 340B program, the higher your likelihood of having data submissions that lead to missed 340B savings opportunities — often substantial savings opportunities.

PART TWO: Overcoming 340B ESP and manufacturer restrictions

Below is a brief checklist from a previous post outlining, in detail, six critical policies any 340B-eligible entity must implement in order to successfully overcome 340B ESP and other manufacturer restrictions.

  • Never upload more data than is absolutely necessary, and required, by 340B ESP.
  • Never assume that 340B prices are restored in your contract pharmacies’ 340B wholesaler accounts by the 10-day post-submission mark (the time frame 340B ESP says to allow).
  • Never assume that any 340B price restoration you have will actually be honored.
  • Never assume submitted eligible dispenses result in 340B price access.
  • When submitting your own reporting to 340B ESP, never pull reports from your TPAs and upload them without making significant modifications.
  • Don’t count-on any support from 340B ESP. Ever.

The good news about 340B ESP, for covered entities

Despite the well-founded outrage over 340B ESP and manufacturer restrictions, ProxsysRx continues to generate significant savings and revenues for the health systems we serve. Altogether, our efforts have generated more than $500 million in 340B savings and revenue for the hospitals we serve.

Two of the most devastating, unlawful and immoral new drug manufacturer 340B restrictions — which have been variously implemented in recent months by Novartis, Johnson & Johnson, AbbVie, Amgen, GSK, EMD Serono, Merck and Sanofi — are 1) the introduction of an arbitrary 40-mile radius for eligible 340B contract pharmacies, and 2) the requirement that 340B covered entities select a single contract pharmacy for all of their 340B-eligible prescriptions.

Taken together, the two new restrictions all-but guarantee that 340B hospitals will be unable to submit any specialty drugs for 340B savings. After all, as one ProxsysRx 340B Program Specialist notes in a previous post: By forcing 340B covered entities to choose a single contract pharmacy, they’re telling hospitals, “You can designate either a retail pharmacy or a specialty pharmacy, but not both.”

As we noted in another previous post, some 340B entities generate as much as 600% in specialty pharmacy revenue from 340B drugs as they do in traditional retail / outpatient pharmacy 340B revenue. For that reason, we’ve added yet another core recommendation for 340B hospitals intent on optimizing revenue from their 340B programs:

Build Your Own 340B Contract Specialty Pharmacy

As we note in yet another previous post thoroughly detailing the process (and the challenges) of building a specialty pharmacy, there is a workaround for 340B hospitals forced to select a single pharmacy for manufacturers’ 340B pricing — and it’s legal in many states. Hospitals can operate specialty pharmacies alongside their retail pharmacies. As long as the two operations are physically in their own spaces (working under separate Pharmacists-In-Charge), and there is no procedural, functional or personnel overlap between the two.

In some states, you can combine specialty and retail, but the retail operation is subject to the heavy policy and process requirements of specialty accreditation — which is an onerous burden for a retail pharmacy. Regardless of prevailing state laws, ProxsysRx can help health systems navigate the best options for dealing with state guidelines, maximizing available space, and meeting patient needs.

ProxsysRx is here to help, if you have questions.

There are so many ways to optimize your 340B drug program savings & benefits, and overcome manufacturer restrictions while still minimizing the likelihood of noncompliance. For more information, contact Howard Hall. C: 214.808.2700 |