Friday, January 29, 2016

What Is The 340B Drug Pricing Program?

Intelligent Solutions in Pharmacy Benefits
612 Wheelers Farms Road, Milford, CT 06461
(888) 797-2479

In the world of pharmacy benefits, there are a multitude of programs, policies and laws that must be completely understood by the parties involved. However, a particular program that must not be overlooked is the 340B Drug Pricing Program. Here at PBIRx, we recognize the significance and value of this program, which is why we have made it a priority to offer independent third party 340B compliance audits as one of our services. But, if you are unsure of what the 340B Drug Pricing Program is to begin with, then you may not be clear on how our services can help you. Below is summarized information on the 340B Drug Pricing Program:

340B Drug Pricing Program

Ultimately, the 340B Drug Pricing Program is a program that the United States federal government created in 1992 in order to ensure that certain discounts are offered to eligible healthcare organizations and covered entities. But before we can truly understand how and why the program was developed, it is important to briefly touch on the Medicaid Rebate Program, which was implemented by Congress two years prior in 1990.

The Medicaid Rebate Program was designed so that drug manufacturers had to “pay rebates to state Medicaid programs for covered outpatient drugs, as defined in the Medicaid rebate statute.” However, the American Action Forum explains that although this was enacted to reduce Medicaid costs, the results that followed eventually caused providers such as hospitals with low-income patients to absorb some of the remaining costs of providing drugs. Thus, the 340B program was implemented to make sure that those healthcare providers who serve low-income patients would also receive certain discounts. explains that according to the Congressional report, the ultimate purpose of the program is to “enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive service.”

Who Is Eligible?

In order to be eligible to participate in the 340B Drug Pricing Program, covered entities must fall into one of the following categories:

1. Hospitals, including:
- Disproportionate Share Hospitals
- Children's Hospitals
- Cancer Hospitals
- Sole Community Hospitals
- Rural Referral Centers
- Critical Access Hospitals

2. Health Centers, including:
- Federally Qualified Health Centers and Federally Qualified Health Center Look-Alikes
- Native Hawaiian Health Centers
- Tribal/Urban Indian Health Centers

3. Ryan HIV/AIDS Program Grantees

4. Specialized Clinics, including:
- Black Lung Clinics
- Comprehensive Hemophilia Diagnostic Treatment Centers
- Title X Family Planning Clinics
- Sexually Transmitted Disease Clinics

Though, there are other qualifications that must be met - contact PBIRx for the specifics.

PBIRx’s Role in the 340B Program

Here at PBIRx, it is our goal to ensure that our eligible clients maintain their 340B status, which is why we provide on-site audits that not only prepare a covered entity for an actual HRSA audit, but also identify changes that must be made to be compliant with a HRSA audit. Our 340B dedicated staff of experts works diligently with each client to review their policies and procedures surrounding 340B medications, verify their internal controls meant to prevent diversion and duplicate discounts, and test any transactions that have to do with 340B medications. But that is certainly not all! We also review contract pharmacy data, offer quarterly compliance meetings, provide an ORA report, and offer information about the latest policy changes, depending on the client’s level of service.

For more information about the 340B Drug Pricing Program and the services PBIRx provides in all areas of the program, please visit us at or call (888) 797-2479 today.