The Coming Battle Over 340B Contract Pharmacies

Check out an important new must-read white paper for anyone in the drug channel: The 340B Drug Discount Program: A Review and Analysis Of The 340b Program. The report was funded by an unusual coalition of industry associations representing manufacturers, pharmacy benefit managers (PBMs), independent pharmacies, and oncology practices. (See the list below.) It provides a useful 340B background and explains how hospitals are profiting in ways that seem to go far beyond the program’s original intent.

Contract pharmacies are one crucial, but little understood, part of the program. Using contract pharmacies, a hospital can (legally) profit from a commercially-insured prescription filled by a community retail pharmacy and paid by a private third-party payer. Pembroke Consulting’s research shows that Walgreens is the biggest 340B player. What’s more, manufacturers could potentially pay both 340B and PBM rebates for the same commercial prescription.

To 340B or not to 340B? Given the money involved, it’s not a tough question for hospitals anymore. But something is rotten in the state of Denmark. Read on and let me know if you agree.

TO TAKE ARMS AGAINST A SEA OF TROUBLES

Here are the sponsoring organizations: the Biotechnology Industry Organization (BIO), the Community Oncology Alliance (COA), the National Community Pharmacists Association (NCPA), National Patient Advocate Foundation (NPAF), the Pharmaceutical Care Management Association (PCMA) and the Pharmaceutical Research and Manufacturers of America (PhRMA). I can’t recall an issue that unified such a diverse stakeholder group.

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