Many 340B covered entities elect to dispense 340B drugs to patients through contract pharmacy services, an arrangement in which the 340B covered entity signs a contract with a pharmacy to provide pharmacy services. This helps facilitate program participation for those covered entities that do not have access to available or appropriate ‘‘in-house’’ pharmacy services, for those covered entities that have access to ‘‘in-house’’ pharmacy services but wish to supplement these services, and covered entities that wish to utilize multiple contract pharmacies to increase patient access to 340B drugs.
A "ship to, bill to" procedure is used. The covered entity purchases the drug; the manufacturer/wholesaler must bill the covered entity for the drug that it purchased, but ships the drug directly to the contract pharmacy. The covered entity is responsible for compliance of their contract pharmacy arrangement(s) and must maintain ownership of the 340B drugs at all times.
Notice Regarding 340B Drug Pricing Program — Contract Pharmacy Services (PDF - 72.6 KB) are the guidelines that govern the operation and compliance of contract pharmacies for 340B covered entities.
Covered entities are responsible for ensuring compliance of their contract pharmacy arrangement(s) with all 340B Program requirements to prevent diversion and duplicate discounts as outlined in the contract pharmacy guidelines.
All covered entities are required to maintain auditable records and are expected to conduct annual audits of contract pharmacies that are performed by an independent outside auditor as a way to fulfill their ongoing obligation of compliance. To the extent that any compliance activity or audit performed by a covered entity indicates that there has been a violation of 340B Program requirements, such finding should be disclosed to HRSA along with the covered entity's plan to address the violation.
To ensure that drug manufacturers and drug wholesalers recognize contract pharmacy arrangements, covered entities that elect to utilize contract pharmacy arrangements are required to register each contract pharmacy. Covered entities must register contract pharmacy arrangements online during an open registration period.
All contract pharmacies must be listed with correct names and addresses to avoid lengthy delays in implementation. A contract pharmacy is not eligible to be utilized by the covered entity until it is approved by the Office of Pharmacy Affairs and listed on the 340B database. Drug manufacturers and drug wholesalers will not make drug shipments to pharmacies that do not match the legal description and location listed on the 340B database.
Registration Process for a Contract Pharmacy
Contract Pharmacy Implementation and Integrity Solutions recorded webcast
Financial Analysis: In-House Pharmacy Model (XLS - 32 KB) helps assess financial implications of using the in-house model
Financial Analysis: Contract Pharmacy Model (XLS - 42 KB) helps assess financial implications of using the contract model