HRSA Issues Notice Allowing 340B Programs to Contract with Multiple Pharmacies


On March 5, 2010, the Health Resources and Services Administration (“HRSA”) issued a final notice, effective April 5, 2010, that allows covered entities participating in the 340B Drug Pricing Program to contract with multiple contract pharmacies to provide discounted drugs. This long-awaited development (the proposed notice was issued in January 2007) makes it easier for a wide range of providers, including disproportionate share hospitals, federally qualified health centers, and other publicly funded clinics, to make discounted medications available to their patients.

Prior to this notice, covered entities could contract with multiple pharmacies only by participating in an alternative methods demonstration program (“AMDP”). Covered entities were otherwise limited to using a single in-house pharmacy or contracting with a single contract pharmacy, based on concerns that the discounted drugs would be diverted to individuals using the pharmacies who do not qualify as patients of the 340B covered entities. As a result of this restriction, however, many providers noted transportation or other difficulties that limited patients’ ability to access the single pharmacy. By contracting with multiple pharmacies (or multiple chain pharmacy locations), covered entities will be able to expand access to medically indigent populations through more conveniently located pharmacies in their communities.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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