The Do’s and Don’ts of Contract Pharmacies in 340B Discount Drug Program for HTCs
by Elizabeth “Issie” Karan, Legal Counsel

The Office of Pharmacy Affairs (OPA) within the Health and Resources Services Administration (HRSA) oversees the 340B Discount Drug Program, and contract pharmacies operations. HRSA released guidance on contract pharmacy operations in 2010 which allows for the utilization of multiple contract pharmacies in the 340B Program and provides suggested contract pharmacy provisions (2010 Guidance). In the 2010 Guidance, OPA makes very clear that, even when covered entities utilize a contract pharmacy, they cannot outsource their 340B Program compliance obligations. Meaning, if any duplicate discounts or diversion occur, covered entities, like hemophilia treatment centers (HTCs), will be liable to manufacturers for repayment regardless of what caused the non-compliance.

If you have ever read the 2010 Guidance (which we recommend doing), then you understand that it is just a starting point for contract pharmacy compliance. Generally, HTCs must have sufficient information to meet auditable records standard and audit prescriptions to ensure compliance. Additionally, HTCs should ensure they can recoup damages from contract pharmacies for any failure to meet their obligations under the arrangement. Given the variety of ways contract pharmacies arrangements can operate, we strongly recommend that HTCs get each contract pharmacy agreements reviewed by an expert.

Increasingly insurance companies are creating exclusive networks for the provision of products, leaving contract pharmacies as the only option for HTCs to serve their patients under the 340B Program. Despite potentially having less leverage under these circumstances, HTCs still must maintain 340B Program compliance. From a cost-benefit analysis perspective, in addition to being able to serve patients, some 340B Program benefit from a contract pharmacy arrangement is preferrable to nothing. However, this calculation changes if the contract pharmacy is not a good partner. Therefore, do your homework before signing up with any vendor, especially if that vendor is requesting unnecessary data from your HTC. As always, the Hemophilia Alliance legal and payer teams stand ready to assist however possible.