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OIG Releases Study on 340B Contract Pharmacies

The Office of the Inspector General (OIG) released Feb. 4 a report on the use of contract pharmacies in the 340B Drug Pricing Program. Since 2010, the Office of Pharmacy Affairs at the Health Resources and Services Administration (HRSA) has permitted covered entities to use multiple contract pharmacies in addition to in-house pharmacies to expand patient access.

The OIG gathered information from a sample of covered entities—15 disproportionate share hospitals and 15 community health centers—to learn about their contract pharmacy arrangements. Based on data obtained from these entities, OIG found the following, although importantly OIG did not conclude that entities were out of compliance or make any recommendations to HRSA.

  1. Covered entities are engaging in efforts to prevent diversion of 340B drugs to ineligible patients. However, covered entities implement the requirement in varying ways. The lack of clarity in guidance around the definition of a patient has long been a concern to covered entities and is likely to be addressed in an expected HRSA regulation to be released this summer.
  2. Efforts to prevent duplicate discounts from both 340B and Medicaid rebates are complicated by, in particular, issues with the expansion of Medicaid drug rebates to managed care.  Covered entities have also been urging HRSA and the Centers for Medicare & Medicaid Services to provide additional guidance to providers and states on this issue.
  3. Not all covered entities sampled offer the discounted 340B price to uninsured patients in their contract pharmacy arrangements.  OIG noted that this is not a program requirement, and those covered entities cited technical complications.
  4. Nearly all covered entities in the report monitor their contract pharmacy arrangements, although the extent of the monitoring varies.

In response to the report, HRSA sent a Feb. 5 letter to 340B covered entities that described the patient access benefits of contract pharmacies and the 340B program overall. The letter outlined contract pharmacy oversight requirements.


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