How Does Contract Pharmacy Work

What is 340B Contract Pharmacy?

If you have an in-house pharmacy at your covered entity, you may be providing discounted 340B drugs to your patients seen in your outpa­tient clinics, in an emergency room, or patients being discharged, and utilizing the savings to improve patient care.

But where do your patients go for their medications after they leave your facil­ity?

Did you know that if your covered entity maintains responsi­bility for a patient’s care, you are eligible to purchase drugs for them at 340B prices even if you’re not giving them drugs from your own pharmacy?

If your patients are getting prescriptions filled at local pharmacies, you can partner with one or more pharmacies and distribute 340B discounted drugs to them, generating even more 340B discount for your entity to use to provide patient care.

Your patients are probably already filling their prescriptions in pharmacies in your area that are convenient for them. You are eligible to utilize 340B dis­counts on their drugs for all of your patients, even if they’re fully insured, and even for their refills! This is often a significant positive financial impact for a hospital.

Creative Savings

Many of your patients are probably getting their prescriptions filled in your area’s local pharmacies. Because you manage their care, you can actually get your 340B discount on these drugs too. Your hospital or health center orders these replacement drugs for the pharmacy using your 340B discount.

Let’s walk through how this works. The following example shows how a phar­macy normally handles a prescription.

Without Contract Pharmacy

For a prescription that costs $100, the pharmacy collects $100 from a patient’s co-pay and insurance, and they might have to pay $78 to replace that drug, leaving the pharmacy with a $22 profit.

With Contract Pharmacy

With 340B contract pharmacy, your entity can purchase the replacement drug at substantially less than the pharmacy would have paid. In this example, your 340B cost is $38 less than the pharmacy’s price, creating a $38 savings oppor­tunity. Pharmacy Profit Drug Cost $78 $22 340B Margin $22 $40 Drug Cost $38 Pharmacy Profit.