Evaluating Contract Pharmacy

Evaluating Contract Pharmacy for your Entity

There are a number of variables that affect the actual 340B discount rendered through contract pharmacy relationships, including the percentage of Medicaid-paid prescriptions, the average cost of prescribed medications from the hospital, variations in 340B pricing, fee terms with the pharmacy, and a hospital’s final interpretation of eligible patients. We’ve found that hospitals are nevertheless able to assess the viability of contract pharmacy relationships.


  • Maintain responsibility for care
  • Employ physicians or have the ability to bill for their professional services

Financial Evaluation:

  • Estimating benefit from volume of eligible prescriptions

If the 340B covered entity can assemble a list of NPIs of prescribers affiliated with the hospital per the Definition of a Patient, many pharmacies are able to readily compare their dispense data against that list. This provides reasonable accuracy in identifying the count of eligible prescrip­tions.

The accuracy of the provider list is not critical for a quality estimate, but it is useful to assure that the list is kept reasonably broad, including all prescribers who are likely to be writing prescrip­tions on the hospital’s behalf, including hospitalists, interns, nurse practitioners, and those pro­fessionals to whom patients are commonly referred. This will provide a fairly close estimate, but may include some prescriptions that might be excluded in practice.

This level requires simply a list of NPIs, in any format.

Vendor Fees – fees are based on work done, not on a percentage or your benefit.

Pharmacy Fees (See Pricing Model)