Contract Pharmacies Permitted to Manage Drugs Under 340B Program

Chicago, IL—The ability to use contract pharmacies to deliver drugs for covered entities is one provision of the 340B drug pricing program. This provision allows for the use of an inhouse pharmacy and/or an external retail pharmacy or mail-order pharmacies with the use of virtual inventories, according to Kent Nicaud, Vice President, Physician Administrative Services, Memorial Hos - pital at Gulfport, MS.

Mr Nicaud and Martin Shenk, CMPE, Chief Operating Officer, the Medical Oncology Group, Gulfport, MS, participated in a discussion on this topic during last year’s Cancer Center Business Summit annual meeting.

Detailed Accounting

Contract pharmacies must provide the covered entity with financial statements, a detailed report of collections, and a summary of receiving and dispensing records, and must work with the covered entity to establish and maintain a tracking system to prevent diversion, suggested Mr Nicaud.

“Covered entities must have detailed accounting so that they maintain your covered entity requirement,” he said. Any records maintained that pertain to compliance with the 340B program requirements are subject to audit by a participating manufacturer and/or the Office of Pharmacy Affairs to protect against diversion.

340B Drugs Covered

Drugs covered under the 340B program are outpatient prescription drugs provided to patients of the covered entity, and over-the-counter drugs if a prescriber writes a prescription for the drug. Vaccines given in inpatient settings and orphan drugs for newly eligible entities are excluded.

New guidelines, which have been in place since April 5, 2010, now allow the use of multiple pharmacies as a standard option for 340Bcovered entities. Covered entities may also contract with mail-order pharmacies. When using contract pharmacies, there is no need to maintain separate inventories.

Contract Review

Covered entity contract pharmacy agreements must include covered entity compliance agreements. The Office of Pharmacy Affairs will not review contracts, and it recommends that covered entities engage their legal counsel to review all contracts or other legal documents to ensure that all federal, state, and local requirements are met.

“Not only can you benefit from your 340B infusion center, you can also benefit from 340B from all of your employee physicians. Any physician that works in your hospital system who writes a prescription for oral, as well as infusible, medications now qualifies for 340B pricing,” said Mr Shenk.

“The hospital can, by contracting through the virtual pharmacies, get a benefit from all the prescription medications that are prescribed by their affiliated physicians,” Mr Shenk added.

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