June 7, 2023 / By

Contract Pharmacy Woes and What Your Pharmacy Can Do

Contract Pharmacy Woes and What Your Pharmacy Can Do

The 340B program has been instrumental in expanding access to affordable medications for underserved patient populations. As part of the program, covered entities often establish contract pharmacy relationships to extend the reach of discounted medications to eligible patients. However, pharmaceutical manufacturers have imposed restrictions on the use of contract pharmacies. In some cases, pharmaceutical manufacturers have completely blocked the use of contract pharmacy relationships for certain covered entity types.

 These restrictions cause a reduction in access to care for underserved patient populations as well removes 340B savings from covered entities that often rely on it for financial stability. There are numerous different legal battles being fought in attempts to eliminate these restrictions as well as block future efforts to restrict the use of contract pharmacy relationships. Unfortunately, many covered entities cannot ride out the storm of continued attacks on the use of contract pharmacies.

 Is it all really doom and gloom?

 Although contract pharmacy use is being scrutinized and restricted, there are still a number of ways covered entities can pivot.

 Entity owned pharmacies – This method allows for covered entities to circumvent manufacturer restrictions and expand their access for patients. While some restrictions disallow all contract pharmacies for some covered entity types, there are many that limit each covered entity to one contract pharmacy. If a covered entity has an entity owned pharmacy, they in most cases, still can have one contract pharmacy designated for those manufacturers who have imposed the one contract pharmacy per covered entity restriction.

 340B optimization – As we all know the 340B landscape is always changing. This makes an optimized program a moving target. Although sometimes difficult to forecast changes within the 340B space, it is important for covered entities to keep a close eye on their programs to ensure there is no 340B savings being left on the table that could be used to provide services for the underserved population. For the covered entities most restricted by manufacturers, it is imperative to have consistent surveillance of their program to be able to adjust their contract pharmacy relationships as needed to retain savings.

 Addition of other revenue producing services – This is easier said than done for most covered entities. These services could range from increase ancillary services to other cutting edge services like pharmacogenetic therapy, which utilizes genetic testing to modify medication therapy for improved patient health outcomes.

 In summary pharmaceutical manufacturer restrictions on contract pharmacy usage in the 340B landscape is hot topic in recent news. It seems that more and more manufacturers are either joining in the restricting fun or are further increasing their imposed restrictions. Although it seems like doom and gloom, there is a variety of strategies that covered entities could implement in order to reduce the negative impacts of these restrictions.