What Are The Requirements For 340B Programs?
Covered entities must meet the following ongoing requirements:
- Keep 340B OPAIS information accurate and up to date.
- Register new outpatient facilities and contract pharmacies as they are added.
- Prevent diversion to ineligible patients.
- Maintain auditable records documenting compliance with 340B Program requirements.
As a covered entity, it’s also your responsibility to notify drug manufacturers and wholesalers that you plan to purchase drugs at 340B prices. The wholesalers and manufacturers verify your enrollment on the 340B database and must sell their drugs to you — at or below the maximum price determined under the 340B statute.
How do I enroll in the 340B program?
To register, you need a 340B Office of Pharmacy Affairs (340B OPAIS) user account. To get started, visit the 340B OPAIS Registration page, and select the appropriate link toward the bottom of the page — either Grantee Registration or Hospital Registration.
The system should run you through the process from there. It’s important to know, in advance, that you must complete your registration in a single session. Which is why you’ll need to have your latest filed Medicare cost report on-hand while you’re completing the process.
You’ll also you’ll need to enroll your main location first, then add any Child Sites.
What is a 340B Child Site?
HRSA defines a 340B Child Site as an off-site outpatient clinic or location that uses, or purchases, 340B drugs for its patients. In general, “off-site” means a location has a separate physical address than the hospital parent site, and is not located within the main hospital.
Chapter 2: What entities, patients and drugs are 340B-eligible?
The following hospital categories are eligible for 340B participation
- Disproportionate Share Hospitals (DSH)
- Sole Community Hospitals (SCH)
- Rural Referral Centers (RRC)
- Critical Access Hospitals (CAH)
- Children’s Hospitals (PED)
- Free-Standing Cancer Hospitals (CAN)
340B eligibility requirements: An overview
In order for hospitals to qualify for the 340B program, they must meet the three requirements below — unless they are Rural Hospitals; in which case, they must meet only the first two requirements.
- Government owned or government-controlled.
In other words, hospitals must be either A) Owned or operated by a state or local government, B) Public or private non-profit corporations which have been formally granted governmental powers by their state or local government, OR C) Private non-profit hospitals under contract with their state or local governments to provide health care services to low-income patients who are not entitled to Medicare or Medicaid benefits. - Disproportionate Share Hospitals.
Disproportionate Share Hospitals must have an adjustment percentage (or the percentage by which the hospital’s allowable operating costs of inpatient hospital services exceeds the hospital’s target amount) higher than 11.75% for the most recent cost reporting period ending before the calendar quarter involved. Sole Community Hospitals and Rural Referral Centers must have an adjustment percentage of greater than 8 percent.Free-standing children’s hospitals and free-standing cancer hospitals must have a payer mix that gives them a DSH percentage of greater than 11.75 percent. Critical Access Hospitals do not have a DSH adjustment percentage requirement.NOTE: A hospital’s DSH adjustment depends on the number of inpatient days of its Medicaid and Supplemental Security Income (SSI) patients.
- DSH hospitals, children’s hospitals and free-standing cancer hospitals meeting the first two criteria.
These hospitals are eligible to participate in the 340B program if they do not obtain covered outpatient drugs through Group Purchasing Organizations (GPOs), or through other group purchasing arrangements. At the same time, hospitals participating in 340B as CAHs, RRCs and SCHs are not subject to the GPO prohibition.
Which patients are covered under 340B programs?
Covered entities can dispense 340B-eligible prescriptions to patients who (1) Have established relationships with the covered entity, such that the entity maintains records of the patient's care; (2) Receive care from a professional employed by the covered entity, or under contract or other arrangements (e.g., referral for consultation) with the covered entity, such that responsibility for the care remains with the covered entity; and (3) Receive health services from the covered entity that are consistent with the services for which grant funding has been provided to the entity.
Under these guidelines, an individual is not considered a covered entity’s patient if the only health care service received by the patient from the entity is the dispensing of a drug for subsequent self-administration — or administration in the home setting.
Are 340B prices available for inpatient prescriptions?
No. 340B pricing applies to covered outpatient prescriptions only. Covered entities must therefore maintain appropriate tracking systems to ensure that covered outpatient drugs purchased through the 340B Program are not used for hospital inpatients — and it is the responsibility of health systems in the program to ensure that appropriate safeguards are in place to prevent these diversions.
What prescription drugs are eligible for 340B Savings?
In general, 340B eligibility involves both prescription medications and the covered entity writing the prescriptions. Here’s a simple checklist for determining whether drugs are eligible.
- As a covered entity, you have a relationship with the patient and maintains records of care.
- The services are provided by a healthcare professional who is either employed by, or contracted with, you.
- The responsibility for care rests with you, the covered entity.
- The services are within the scope of project for grantees and designees.
- The service provided must be more than just dispensing medication.
- The drug is administered in an eligible outpatient location or dispensed by one of your 340B contract pharmacies.
General drug exceptions to 340B eligibility
There are a few 340B-eligibility exceptions. These include vaccines and Orphan Drugs (which are, by definition, medications specifically developed to treat rare diseases or conditions — and drugs that have only recently been granted New Drug Status by the FDA).
Eligible drugs frequently NOT submitted for 340B savings
While narcotic medications are included among 340B eligible drugs, covered entities often choose to exclude them from their programs — due, primarily, to the complexity of procuring these medications for replenishment. That procurement complexity adds-up to significant time-and-effort costs. And as we’ve noted in a previous post, there’s no point in utilizing 340B discounts for medications when the time-and-effort costs exceed the savings generated.
About 340B Orphan Drugs
For the following covered entities, 340B-covered drugs do not include any drugs designated by the Secretary under Section 526 of the Federal Food, Drug, and Cosmetic Act for rare diseases and conditions:
- Free-standing cancer hospitals
- Rural referral centers
- Sole community hospitals
- Critical access hospitals
Take full advantage of specialty drug discounts
Specialty drugs, which Medicare defined (in 2019) as any drug costing more than $670 monthly, constituted about 50% of the overall prescription drug market’s expenditures (some $161 billion) in 2020. That’s a 29% increase of total expenditures over 2015. What’s more, according to Acentrus Specialty, 8 out of every 10 new drugs approved by the FDA in 2020 were specialty drugs. All of which makes specialty drugs the fastest-growing, and largest part, of the prescription-drug market.
Benefits of contracting with specialty pharmacies for 340B prescriptions
Where your health system’s mission is concerned, the greatest benefit of contracting with one or more specialty pharmacies is the significantly increased potential for generating savings, and for passing-along those savings to your patients in need. Today, hospitals and other 340B-covered entities can acquire many specialty drugs for as little as 1¢. That happens when a 340B-eligible drug has reached its 100% Medicaid rebate cap.
For instance, Humira, the top-selling drug in the U.S., reached the rebate cap in 2016. And for years after that, 340B hospitals were able to buy Humira for 1¢. Many other specialty drugs — including Epclusa, Harvoni, Imbruvica, Iressa, Gilenya, Revlimid and Stelara — offer 340B discounts of 70% to 100%.
That said, before you contract with any specialty pharmacy for your health system’s 340B program, it’s important that you’re aware of its insurance relationships. Insurance companies dictate which specialty pharmacies can dispense 340B-eligible specialty drugs, so it’s critical that they are indeed 340B-eligible.
Specialty pharmacies generate fewer 340B-eligible claims, and higher net savings
According to the estimates of several online sources, the average retail pharmacy prescription in 2020 cost $566 per month — while the average specialty drug prescription cost $6,565. AARP estimated, in a September 2021 article, that —in 2020 — the average annual cost for a single specialty medication used on a chronic basis was $84,442.
340B exposure risk is decreased.
Fewer claims means less exposure to potential audits and compliance claims. What’s more, most specialty pharmacies have dozens, even hundreds, of 340B contract pharmacy relationships; which means that they’re highly experienced, and educated, in maintaining 340B compliance for the covered entities they serve.
Implement a robust Meds To Beds program
Benefits of a Meds To Beds Program: Overview
On a purely practical level, a well-managed bedside prescription delivery program can improve your health system’s pharmacy revenue.
On the human level, Meds To Beds is more than a tangible sign of your system’s care of, and for, the individuals & families you treat. It’s your first line of offense in ensuring that your patients follow the prescription protocols you’ve given them — significantly decreasing the likelihood of their readmission while, in the process, improving your patient’s satisfaction ratings.
In general, health systems fail to implement Bedside Prescription Delivery programs because of the costs of staffing and administrations. In our experience, managing dozens of Meds to Beds programs, those costs are more than offset by the revenues generated. In one Mississippi health system alone, ProxsysRx filled over 18,000 outpatient prescriptions in just 12 months. During that time, the health system’s pharmacy revenues increased 125%, while its readmissions decreased 79%.
How a good Meds To Beds Program works
First, your health system’s retail pharmacy staff must commit to partner with your case management teams, nurses and physicians to implement a cohesive medication treatment plan for your patients who are transitioning back to their lives at home. That commitment means your pharmacy staff must be willing to perform the work necessary to enhance your health system’s current efforts, ensuring that there is never any additional burden placed on your hospital’s providers, nurses and staff.
Next, when prescriptions are delivered bedside to discharging patients, you should be sure to have a pharmacist available to help patients —reviewing both prescription protocols and any issues that could compromise your patients’ willingness (or ability) to maintain compliance with their prescriptions after they leave the hospital.
Once a patients accepts his or her prescriptions, and understands how to maintain compliance, your meds to beds program should pass-off the job of continued patient contact to a readmission risk reduction program.
How Meds To Beds benefit 340B drug programs
Bedside prescription delivery is arguably the most effective method for ensuring that your patients’ prescriptions are captured before they leave your care.
Put another way, your Meds To Beds program should not only support health systems' mission of maximizing patient care, compliance and satisfaction while minimizing readmissions, it should serve as a funnel for directing patients into 340B programs. This role is particularly significant, when you consider the aggressive efforts manufacturers have undertaken to minimize the number of pharmacies that 340B-eligible hospitals can utilize in their 340B programs.
Many manufacturers have launched initiatives to limit their support of eligible entities’ contract pharmacies to one per hospital. They’ve also fought HRSA’s efforts to overturn those limits, through protracted legal battles. It goes without saying, those manufacturers have determined that legal battles are less costly to them than upholding their legal obligation to support 340B drug discounting.
How Meds To Beds benefits your 340B patients
Patients entered into your 340B program “funnel” generally receive superior ongoing professional care and support, after they are discharges. And as we’ve mentioned elsewhere, hospitals with multiple contract pharmacies in their networks offer patients more choices, and convenience, in filling their prescriptions.
Statistical research conclusively demonstrates that two primary factors driving patient non-compliance are lack of education and understanding, and lack of access (both in terms of financial means and proximity) to pharmacies. Which is why many hospitals with 340B programs supplement their Meds To Beds programs by offering home delivery and prescription discounts to financially-challenged patients. Those health systems generally agree that the costs of additional patient support are more than offset by the benefits of superior post-discharge care — not to mention the savings that come with reducing readmissions.
According to a 2020 study published by Frontiers In Public Health, Meds To Beds programs have been shown to significantly reduce 30-day hospital readmissions — particularly among older adult patients.
Understand, and overcome, your TPAs’ limitations
TPAs play a critical role in 340B programs. It’s their job to “match” prescription claims from your contract pharmacies with patient data hospitals provide, and then to determine the eligibility of those claims. Without a match, a prescription cannot be qualified for 340B eligibility and savings.
Your TPAs’ ability to accurately qualify your 340B claims is only as reliable as the information you provide. Their systems simply aren’t configured to monitor and spot mismatches in that data.
340B data mismatches can be extremely trivial.
One of the most common reasons 340B claims are misqualified — particularly with Medicare patients — is inconsistency in Date Of Birth entries. Patient Name mismatches is another common cause of misqualifications. For instance, you may have a patient registered as Bob in your pharmacy system and Robert on your hospital’s system.
That said, the more complex 340B programs are, the higher the likelihood that their automated data submission process will be flawed. Which will naturally lead to missing EHR encounters and missed 340B savings opportunities — quite possibly substantial savings opportunities.
Technology often causes 340B data mismatches
The process of monitoring 340B programs is especially difficult when multiple TPAs are involved. Every TPA’s proprietary software system’s interface is unique. Making matters even more complicated, the reporting structure within TPA portals vary significantly from one to another. We’ve found that health system 340B personnel often spend an inordinate amount of time simply trying to access the information that they need — which leaves them far too little time to proactively take advantage of that information.
How common are TPA 340B misqualifications?
Mismatch rates vary from health system to health system, but we can say this with confidence: If you have a 340B program already in place, it’s probably a lot higher than you think.
One of the health systems ProxsysRx serves employs three experienced and well-trained full-time professionals — who monitor their system’s 340B claims on a full-time basis. And yet, during the first six weeks ProxsysRx supported their efforts, we provided matching justification for, and generated $187,000 worth of, 340B savings that they’d overlooked.
Avoid 340B Double-Dipping
The 340B program does not allow you to take advantage of 340B discounts and Medicaid drug rebates for the same drugs. That’s the practice known as Double Dipping, and as a covered entity, you need to maintain compliance mechanisms that prevent duplicate discounts.
Preventing 340B double-dipping begins at enrollment
If you decide to Carve-In Medicaid fee-for-service, you’ll be required to list each Medicaid state where plan to bill, as well as the corresponding billing number(s) you’ll list on your bills to those states. It follows, then, that you shouldn’t list any Medicaid states where you plan to carve-out.
Common 340B Errors to avoid in your program
Poor tracking. You must be able to prove that every drug purchased on your 340B account is administered to an eligible patient from an eligible point of service.
Lack of contract pharmacy oversight. As a covered entity, you’re ultimately responsible for monitoring your contract pharmacies and ensuring that they maintain compliance with all 340B program requirements. If you identify any diversions or duplicate discounts, it’s your responsibility to notify the Office of Population Affairs (OPA) of the violation — and offer a remedy.
Having too many contract pharmacies. The general rule of thumb in establishing your contract pharmacy network, is to limit your pharmacy contracts to five. Having more than five can raise red flags with regulators. OIG has generally found that health systems simply aren’t successful in effectively overseeing more than that number of contract relationships.
Failing to register all of your Child sites. Even if you have child site inside your hospital, or another registered primary facility, you should register it. That way, if you ever need to move that child site, you won't have to go through the registration process — and that typically takes six to nine months, sometimes an entire year. And during that time, you will not be legally entitled to 340B savings .
Manufacturers Accelerate 340B Drug Pricing Restrictions
There’s an old saying that it’s better to be rich and guilty than poor and innocent. It’s a sad truth that accurately reflects the current state of 340B manufacturer restrictions, particularly in the wake of the January 30, 2023 decision by the U.S. Court of Appeals for the Third Circuit — which was largely in favor of three drug companies that have imposed harmful limits on safety-net hospitals’ access to 340B drug pricing program discounts.
Novartis introduced a new tactic to evade its 340B obligations.
Novartis was the first drug manufacturer to limit 340B-eligible contract pharmacies to those located within 40 miles of the covered entity will have pricing added. On the surface, this doesn't seem particularly problematic. After all, most, if not all, of a typical 340B-eligible health system’s retail contract pharmacies — from chains to local independents — will still get 340B pricing. The problem with the 40-mile radius, and Novartis knows this, has to do with covered entities’ specialty pharmacy networks.
The number of specialty pharmacies across the country is significantly lower than the number of retail pharmacies — and a significant percentage of those pharmacies serving 340B-eligible entities are located outside that 40-mile radius.
On top of that, there’s the difficulty of 1) getting PBMs to allow pharmacies to dispense for their patients — other than the pharmacies health systems own — and 2) getting manufacturers to allow purchase of their specialty meds.
Johnson & Johnson’s 340B restrictions are even worse.
On February 15, 2023, one of the clients we serve forwarded us a 10-page, 3914-word letter they’d received from Johnson & Johnson. After they’d spent who-knows-how-many-hours poring over the contents, their email included one genuinely troubled question: “Does this mean what we think it means?”
The key restriction to which they were referring (which Johnson & Johnson announced would go into effect starting March 7, 2023) was as follows:
If a non-grantee Covered Entity does not have an in-house pharmacy, such Covered Entity may designate a single contract pharmacy location registered on the HRSA OPAIS database for delivery of 340B-priced covered outpatient drugs listed on Attachment A if (I) the Covered Entity provides limited claims data with respect to that contract pharmacy location and (ii) that single contract pharmacy location is within 40 miles of the Covered Entity parent site.
In plain English, Johnson & Johnson is telling 340B covered entities, that — starting March 7 — they can designate only one pharmacy as a contract pharmacy in their networks, AND that the pharmacy has to be located within 40 miles of the health systems’ campuses.
Consider the implications for 340B-eligible patients who lack easy access to transportation: For all practical purposes it means that, unless that single contract pharmacy offers prescription-shipping services, they’re either NOT getting their medication — or they’ll be incurring significant personal costs to fill their prescriptions.
Novartis and J&J’s 340B restrictions violate a core patient right: Choice.
One of the most critical benefits our vast pharmacy industry offers is patient choice. By law, patients have the right to choose where they get their medications. Covered entities don’t dictate which pharmacies their patients use. But when restrictions limit 340B pricing to one contract pharmacy (much less zero pharmacies), they’re robbing patients of their legal right to choose.
Taking their cue from J&J, three more manufacturers — AbbVie, Amgen and GSK — promptly imposed 40-mile restrictions on 340B-eligible claims for their drugs. Then, on April 3rd, Novartis implemented its own “single pharmacy within 40 miles” policy.
The impact of 340B ESP and other manufacturer restrictions
Making the rich richer at the expense of the poorest and most vulnerable.
For 340B covered entities operating without the sophisticated processes and advanced analytical software developed by ProxsysRx, the impact of manufacturer restrictions has been devastating. 340B revenues for numerous covered entities has plummeted. Many of those Disproportionate Share Hospitals rely on 340B revenue to help fund their Uncompensated Care and Community Outreach efforts. And when it comes to uncompensated care, the term Disproportionate Share couldn’t be more accurate. In 2020, the average 340B DSH hospital provided $38 million in uncompensated care — while the average non-340B hospital provided just over $14 million (Source: 340B Health).
Dealing daily with 340B ESP and other manufacturer restrictions
For ProxsysRx’s 340B team, those restrictions have meant an exponential increase in the time involved to ensure that the health systems we serve get the 340B savings to which they’re legally entitled. One ProxsysRx 340B Program Specialist estimates that he spends the first two to three hours of every day on the job dealing with manufacturer restrictions — and that’s before he’s submitted the first 340B claim for one of the three covered entity accounts he manages.
Manufacturers currently imposing unlawful 340B program price restrictions
As of April 10, 2023, there were 21 manufacturers imposing restrictions — either through 340B ESP, or independent of the website:
- AbbVie
- Amgen
- AstraZeneca
- Bausch
- Bayer
- Biogen
- Boehringer Ingelheim
- Bristol Myers Squibb*
- Eli Lilly
- EMD Serono
- Exelixis
- Gilead
- GSK
- Johnson & Johnson
- Merck
- Novartis
- Novo Nordisk
- Pfizer
- Sanofi
- UCB
- United
Of the 21, nine currently promise to uphold one of the standards established by the 340B program requirements — enabling covered entities to designate and supply claims for an unlimited number of contract pharmacies. That means 12 (or 57%) of those manufacturers are in open violation of the intent of the 340B program — which was created to enable covered entities to use multiple contract pharmacies.
How ProxsysRx Maintains A Constantly Updated List Of 340B Covered Drugs
Describing just one aspect of his own experience with manufacturer restrictions, one ProxsysRx 340B Program Specialist notes, “Because they're so ambiguous, and changing so quickly, the restrictions force our team to review all of the restricted NDCs on a daily basis. Every pharmacy we serve has to be cognizant of all 1628 restricted NDCs when submitting prescriptions for 340B savings. And when a covered entity has multiple contract pharmacies, there's a multiplier in tracking NDC's and prescriptions.
“Each one of our team members is literally monitoring thousands of prescriptions on a daily basis. Which is one reason our team continues to grow. And why our clients have benefited so greatly from the 340B PRO software we developed, which has enabled us to grow and scale. Because you don't just have a single question needing answers on every prescription. It's not just about the NDC's. There are layers and layers of problem-solving involved.”
Why specialized software is essential for successful 340B programs
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. ProxsysRx rolled-out the first version of 340B Pro in 2021, and we are constantly updating and adjusting it to deal with the ever-evolving challenges manufacturers introduce in their 340B pricing restrictions.
340B programs need TPA support, but TPAs are far from perfect
TPAs’ systems are not especially adept at monitoring and spotting provider / entity data mismatches — which are common occurrences in 340B programs. Nor do their fees generally incentivize them to improve their performance. That’s why helping health systems minimize data mismatches at the source is so critical to maximizing 340B drug pricing program savings for a covered entity — and why meeting that challenge is a core component of our 340B software and service package.
The critical role humans play in the 340B software equation
Over the years, ProxsysRx’s software has identified tens of millions of dollars’ worth of 340B-eligible prescriptions missed by the TPAs working with hospitals we serve — as well as with their contract pharmacy networks. However, software solutions alone can’t reliably requalify prescriptions for 340B drug pricing program savings — for the simple reason that there has to be a reason each prescription is requalified. And that reason has to be defensible, if it’s challenged in audit.
All of that requires 340B program management experience and judgment on a prescription-by-prescription basis, and as anyone familiar with technology can tell you, Artificial Intelligence still has a long way to go in solving problems that require nuance and insight.
What’s more, when a prescription is coded incorrectly by a provider — which happens regularly in even the best-managed 340B programs — it creates what amounts to a Domino Effect of incorrect coding throughout the step-by-step process of submitting that prescription for reimbursement. Without the intervention of an experienced 340B manager, TPA software can actually make the situation even worse.
How ProxsysRx overcomes manufacturer restrictions on 340B pricing.
As much as we’d love to report that we’ve discovered the proverbial magic bullet for piercing manufacturer barriers to optimizing 340B cost savings and revenue, we can’t. Our process starts with an in-depth assessment of a health system’s current 340B-program status (assuming the health system has an active 340B program). Once we’ve conducted that analysis, we work with the health system’s 340B professionals to develop strategies for improvement in every area of its program. ProxsysRx’s 340B support team then implements software-supported processes for auditing missed opportunities.
For most of the hospitals we serve, ProxsysRx’s team also provides hands-on support in managing their 340B programs.
The good news is, our process is producing results. And while those results vary from system to system, one of the small rural hospitals we serve has seen a monthly net savings increase of more than 900% over their historical averages since manufacturer restrictions were implemented.
Below are the seven key elements of our process.
1. Establish communications between health system providers and their outpatient pharmacies.
With manufacturer restrictions, it’s more important than ever that health systems have onsite pharmacies partnering with them to capture as many 340B-eligible prescriptions as possible — in part, to ensure that savings stay within the system, thereby enabling them to pass-along those savings to patients.
- Upload only the 340B Data required, and NO MORE.
As with every aspect of our program, we learned this lesson through experience: When working in the 340B ESP platform, you should never upload any data that isn’t absolutely required by the platform. We submit the NDCs only from manufacturers that impose 340B pricing restrictions that are contingent on data reporting.
- Do NOT trust 340B ESP to restore prices on its promised scheduling.
340B ESP says health systems should expect a period of 10 days, post-submission, for 340B prices to be restored in their contract pharmacies’ 340B wholesaler accounts. In reality, that rarely ever happens within 10 days — if at all. Which is why ProxsysRx has implemented a system for checking all NDCs, in all of our health systems contract pharmacies’ 340B accounts, before instructing their TPAs to restart processing on any restricted NDCs.
4. Do NOT trust 340B ESP price restoration, period.
Health systems cannot assume that any 340B price restorations they have will actually be honored. Manufacturers working with 340B ESP routinely, and unilaterally, decide that the purchases made for arbitrarily-selected contract pharmacies are more than the dispenses.
5. Don’t assume that submitted eligible dispenses result in 340B price access.
Some manufacturers now require you to submit 340B purchase data reports within 45 or 60 days from dispense — or they disallow those submissions. Although ProxsysRx mines clients’ 340B-submission records for eligible prescriptions missed by their TPAs, the time frame is tight with these arbitrary, fraudulent manufacturer requirements — and thus far, we’ve yet to develop a workaround for dealing with them.
6. Don’t assume that 340B ESP will be compatible with your TPAs’ reports.
If you’re thinking you can simply pull reports from your TPAs and upload them, when submitting your own reporting to 340B ESP, think again. Most TPAs’ reports require significant modifications first. Your own uploads have to be submitted in 340B ESP’s exactingly-specified format, and every upload has the potential for reporting errors that can cause failures.
7. Don’t bother asking 340B ESP for help.
Nobody working with 340B ESP — or the manufacturers — has ever helped our team when our clients didn’t receive the 340B prices to which they’re entitled, even when months have passed since we made data submission.
340B Hospitals Should Build Their Own Specialty Pharmacies
For 340B-eligible hospitals dealing with increasingly squeezed bottom lines, an in-house specialty pharmacy offers enormous savings and revenue potential. Some covered entities generate as much as 600% in specialty pharmacy revenue from 340B drugs as they do in traditional retail / outpatient pharmacy 340B revenue.
That said, 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.
The not-so-good news for 340B hospitals is: Opening a specialty pharmacy is extremely challenging — particularly given the effort required just to get access to purchase specialty meds, and then to get “In Network” with PBMs. Payers and manufacturers control the players in Specialty, so newcomers need significant support and guidance navigating the process. That doesn’t even account for how hard it is accrediting and running a Specialty Pharmacy.
How ProxsysRx makes it easier for 340B hospitals
We guide the health systems we serve through the process steps that they’re required to participate in. Fortunately, those steps tend to be the least burdensome in the process. We handle the rest of the process — painstakingly documenting everything we do, and reporting back to the health systems at every critical step.
Ensuring your specialty pharmacy’s success
Internal operations are only part of the formula for a specialty pharmacy’s success. Which is why we seek inclusion from all PBMs in a health system’s area. We go in-network, securing cooperation and approval from all the major local insurers, for the PBMs that their patients are covered by. What’s more, we seek access from the drug manufacturers for what they’re prescribing — even the most egregiously restrictive manufacturers.
Eliminating 340B hospitals’ out-of-pocket costs to build specialty pharmacies
The title of a previous post we’ve published on the topic says it all: “Use Your Hospital’s Retail Pharmacy 340B Drug Savings To Build A Specialty Pharmacy.” ProxsysRx works with the hospitals we serve to improve their 340B programs’ revenue — then implement strategies to fund specialty pharmacies from that improved revenue. The goal is that the hospitals ultimately pay nothing out of pocket to build and manage their own specialty pharmacies.
Finally, unlike other entities in the specialty managed services space, ProxsysRx supports health systems’ Specialty Pharmacies as a white label service (operated under their corporate brands). As a pharmacy partner, we’ve never lost a health system — for the simple reason that we do what’s necessary to ensure they’re happy with our partnership.
The good news for covered entities about 340B
Despite the numerous unlawful restrictions imposed on eligible entities by manufacturers — including alliances with 340B ESP — ProxsysRx continues to benefit the health systems we serve. In fact, since we launched our 340B program, we’ve generated more than $435 million in 340B savings and revenue.
With ProxsysRx’s help, many of the health systems we serve are using those savings to fulfill their missions to serve their communities’ poor and uninsured patients.
ProxsysRx is here to help, if you have questions.
There are so many ways to optimize your 340B drug program savings and benefits — overcoming manufacturer restrictions while maintaining compliance at all times. For more information on any aspect of developing and managing a successful 340B program, contact Howard Hall. C: 214.808.2700 | howard.hall@proxsysrx.com