Purpose of Contract Pharmacies
According to the HRSA 1996 Guidance on contract pharmacy partnerships (1), the goal of Partnering with contract pharmacies is to allow Covered Entities (CE) dispense outpatient 340B discounted drugs at other pharmacies outside their four walls to generate 340B savings to help:
Types of Contract Pharmacies
What are the different types of contract pharmacies a CE can partner with?
1. Independent or privately owned pharmacies typically with less than 4 stores within the same state.
Evaluating 340B Contract Pharmacy Opportunity
There are a few key points to consider ensuring that engaging in contract pharmacy partnership will be beneficial for the CE and their patients.
To evaluate a potential opportunity:
Prescription Volume Analysis and Financial Analysis
This is done to identify the most beneficial partnerships for the CE by ensuring that contract pharmacies have enough 340B eligible prescriptions to generate 340B savings after cost of program implementation and operation are deducted from the total program revenue.
This is done by reviewing CE EMR prescribing data (usually a 90-day range) to identify pharmacies that are capturing CE prescriptions and then sorting these pharmacies based on the volume of prescriptions or the value of the prescriptions.
The goal is to identify best positioned potential contract pharmacies with high volume or high value prescriptions. After the CE has identified the best positioned pharmacies, they need to further analyze this data to ensure that these partnerships will generate reasonable 340B saving for the CE.
The prescription volume analysis is further refined with the contract pharmacy eligible claims model, Medicaid MCO carve in/out status etc. These 2 factors can significantly reduce the number of eligible claims drastically and wipe out savings.
It is very important for the CE to understand the various components of the financial analysis and how they impact the net savings 340B revenue:
Other Key Partners
Apart from the contract pharmacy, there are 2 other key partners to ensuring a beneficial and compliant program.
Contract Pharmacy Agreement
Once the financial analysis looks good, the next step is to enter into a formal agreement with the contract pharmacy.
This is referred to as the Pharmacy Service Agreement (PSA). This is a contract between the CE and the contract pharmacy.
It is the CE responsibility to ensure that the PSA is compliant and contains the required elements per 340B guidelines.
APEXUS has information on what a compliant PSA should look like.
Very important to note that the PSA must be signed and dated to be fully executed and valid.
Registration in OPAIS: Once the PSA is signed, contract pharmacies can now be registered on OPAIS – Office of pharmacy affairs website.
Registration | Official web site of the U.S. Health Resources & Services Administration (hrsa.gov)
Registration Windows are:
CE Ongoing Due Diligence
Lastly , once the 340B savings start coming in, it is important that the CE does their due diligence to ensure that their contract pharmacies maintain ongoing compliance with the 340B program and prevent diversion and duplicate discounts.
This can be done through:
1. 6 Notice Regarding 340B Drug Pricing Program—Contract Pharmacy Services; Final Notice. 75 Fed. Reg., 10278 (Mar. 5, 2010). https://www.gpo.gov/fdsys/pkg/FR-2010-03-05/pdf/2010-4755.pdf