It’s no secret that the 340B Drug Pricing Program has been a lifeline for eligible health systems, enabling them to fill-in the massive revenue gaps inherent to the non-profit-hospital business model (and, in the process, support their mission of providing quality care to our nation’s most vulnerable patients) through access to discounted prescription refills. At the same time, it’s no secret that, since the advent of 340B ESP in 2020, the drug manufacturers have imposed a raft of restrictions on 340B program savings that exist far outside the letter of the law as written by Congress in 1992.

Nowhere have those restrictions been more punitive — and, often, unwarranted — than with specialty pharmacy medications; drugs which typically represent the most expensive (and profitable) in manufacturers’ product lines. Predictably, those restrictions have been met with outrage and indignation among 340B hospitals who are struggling to make ends meet, and have seen their 340B program revenues plummet in the past three years. We’ve expressed our own strong opinions on the topic in several blog posts, including this one.

340B restrictions from the drug manufacturers’ perspective

All that said, if we’re being perfectly fair, we have to admit that manufacturer restrictions on some 340B specialty drugs is understandable, and here’s why: In order to effectively produce positive outcomes, many of those restricted specialty drugs require diagnostic and dispensing skills (not to mention patient-monitoring and prescription-data reporting resources) that a lot of 340B health systems lack. Given that, why would a drug company want to reimburse the price of a 340B-covered specialty drug costing tens of thousands of dollars, if the provider isn’t dispensing it correctly and the patient doesn’t benefit?

Compounding the problem for manufacturers is the Pharmacy Benefit Managers (PBMs) — third-party companies that function as intermediaries between insurance providers and the manufacturers.

PBMs (chief among them Caremark, which is owned by CVS) direct 340B medications to their own pharmacies for guaranteed margins. They also demand, and receive, rebates from manufacturers — while providing no visibility for the distribution or use of those rebates. Rebates which, incidentally, are never passed-along to patients themselves. Whereas all of the 340B hospitals ProxsysRx serves pass-along their 340B savings to patients and/or also use their 340B revenue to enhance and improve the quality of healthcare they provide.

To learn how two hospitals we serve do just that, Click Here to read our blog post, “How To Manage A Director of Pharmacy’s Responsibilities And An Optimized 340B Program. Without Hiring More Staff.”

All of which is why, since 2021, ProxsysRx has invested heavily in offering comprehensive specialty pharmacy support services to 340B hospitals. It’s also why we’re using our expertise to work with, and support, manufacturers in their efforts to ensure that they receive 340B reimbursement for many of their most expensive 340B specialty drugs.

Giving drug manufacturers their due

Despite health systems’ misgivings over 340B restrictions, it is inarguable that drug manufacturers have made — and continue to make — profound contributions to our overall quality of life. It is equally inarguable that the investments they’ve made, in curing and all-but eliminating countless health threats, would be impossible without the promise of profiting from those investments. Where the 340B program is concerned, manufacturers themselves receive Medicare and Medicaid reimbursement for eligible prescriptions.

However, the level of reimbursement they receive is dependent on the proven efficacy of their drugs — and many of their most expensive specialty drugs are manufactured under what might be labeled as “pseudo-approved” status. Which is to say that those drugs require ongoing usage and outcome data to support the manufacturers’ efficacy claims and justify Medicare / Medicaid reimbursement. It’s exactly this kind of data that ProxsysRx’s specialty pharmacy professionals provide in prescribing, dispensing and monitoring 340B eligible specialty drugs for the health systems we serve.

Best practices for dispensing 340B-eligible specialty drugs

The first and most important step your 340B eligible health system can take in increasing its rate of specialty-drug reimbursement is to build an onsite specialty pharmacy staffed by professionals available to work closely with your providers. Every specialty pharmacy patient you serve should be monitored by a clinic pharmacist.

Providing clinical-assessment support for 340B specialty pharmacy patients

Ideally, your providers should have easy access to a specialty pharmacist, who can be present during patients’ initial assessments. They have the training to help your specialty-drug patients (and/or their caregivers) provide full and accurate reports of the medications they’re currently taking, and what side effects they’ve experienced. With that information, the pharmacist can then work hand-in-hand with your providers — making sure that the medication regimens they’ve prescribed are appropriate, up to date, and are the most accurate regimens for your patients and their disease states.

Continuous monitoring & reporting of 340B patient data

In addition to providing ongoing monitoring during treatment, your specialty pharmacists should monitor patients annually — reviewing any side effects they may have experienced, or any other issues they’ve had in taking their medication.

It’s also critically important that your providers know if their 340B specialty-drug patients have skipped any medications, and if that’s affected their disease states. Your hospital’s specialty pharmacists should proactively deliver that monitoring support to your providers. “The point here,” says ProxsysRx Pharmacy Compliance & Accreditation Manager Lauren Robinson, “is to ensure that patients get continuous monitoring by your clinics’ pharmacists. And to ensure that all of your patients’ compliance and outcome data is accurately reported back to the accrediting bodies.”

Ensuring patient satisfaction with their specialty pharmacy’s support

340B specialty pharmacy Patient Satisfaction Surveys are also required as part of the process. What’s more, those surveys must be conducted by independent third parties — to ensure that your pharmacists uphold the standards required of all specialty pharmacies. With the specialty pharmacists ProxsysRx supports, we make sure those standards are met and exceeded, by carefully reviewing their processes. We also work closely with the providers those pharmacists support — to make sure they know what it takes to ensure that their patients know they care about their outcomes, and that they have access to the appropriate medication.

Building your specialty pharmacy with 340B revenue

It’s entirely possible that a number of readers with 340B-eligible hospitals are thinking, “Great ideas, but how could my struggling health system possibly afford to build its own 340B specialty pharmacy?”

ProxsysRx’s unique approach to specialty pharmacy provides health systems with a financial glide path to help fund the undertaking. It starts with optimizing your 340B network. We use our experience, and our proprietary software platform, to help health systems develop programs that optimize their 340B revenue. We’ve done it for hospitals that had no 340B program in place, and we’ve done it for hospitals with existing 340B programs.

We’ll work with you to fully understand where your health system’s prescriptions are going. We’ll evaluate all the existing (or potential) pharmacies you can (or do) have in your network. We’ll get to know your providers, and we’ll educate them on the best practices for working within your hospital’s 340B program. We also make sure that our 340B team members work well within your health system’s culture.

Funding your 340B specialty pharmacy with retail pharmacy revenue

ProxsysRx owns and/or manages retail pharmacies for dozens of health systems. We’ve developed processes you can use for setting-aside your hospital’s retail-pharmacy revenue to fund a specialty pharmacy. We’ll capitalize on the increased prescription revenue we generate for your health system with our Meds To Beds program. We’ll also help your health system increase the number of your own employees filling prescriptions at your on-campus retail pharmacy.

Finally, we’ll optimize opportunities for your hospital’s clinics to affordably fill your patients’ prescriptions using your hospital’s retail pharmacy. Altogether, that can mean literally millions of dollars in new revenue for your health system. More importantly, we’ll do this while we’re helping your hospital improve the quality of care you’re providing your patients.

Specialty drugs NOT under 340B manufacturer restrictions

One of the reasons Rheumatology and Endocrinology are attractive practice areas, where generating 340B prescription revenue is concerned, is that the specialty drugs used to treat conditions in those practice areas are not subject to 340B manufacturer restrictions. For a more comprehensive list of specialty drugs not subject to 340B manufacturer restrictions, please feel free to contact us.

ProxsysRx is here to help, if you have questions.

For more information on any of the topics discussed in this article, contact Howard Hall. C: 214.808.2700 |