A hospital system owns and controls many hospitals, some of which are 340B participating hospitals. The 340B participating hospitals each have their own 340B Program identification number. The hospital system would like to negotiate prices for drugs used at their hospitals, including those that participate in the 340B Program. Does the above scenario violate the 340B GPO prohibition? That is, does it constitute a group purchasing arrangement?

A hospital system owns and controls many hospitals, some of which are 340B participating hospitals. The 340B participating hospitals each have their own 340B Program identification number. The hospital system would like to negotiate prices for drugs used at their hospitals, including those that participate in the 340B Program. Does the above scenario violate the 340B GPO prohibition? That is, does it constitute a group purchasing arrangement?

The 340B participating hospitals within the hospital system in this scenario have separate 340B registrations. For the hospitals registered for the 340B Program as a DSH, children’s hospital or freestanding cancer hospital, conducting price negotiations for covered outpatient drugs with any other hospital would create a prohibited group purchasing arrangement. The hospital system may negotiate prices for inpatient drugs only.

GPO Prohibition
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