How does 340B impact specialty pharmacy?

The 340B program is a major focal point in the pharmaceutical industry, impacting specialty pharmacies, covered entities (CEs), and manufacturers as they navigate a complex landscape of regulatory updates, financial pressures, and patient care needs. What is the current state of 340B, how does it interact with specialty pharmacy, and what opportunities and challenges do stakeholders face?

340B’s expanding role in specialty pharmacy

Originally designed to help safety net providers stretch resources and offer more comprehensive services, the 340B program remains a critical support system for vulnerable patient populations. Specialty drugs have become a central element in the 340B space; though they account for a smaller share of prescriptions, they represent a substantial and growing portion of drug spending and play an essential role in care for 340B-covered patients.

For specialty pharmacies, the 340B program offers unique opportunities to expand services by partnering with CEs. Through these collaborations, specialty pharmacies can leverage 340B’s purchasing power to provide costly medications at reduced prices, improving both affordability and patient adherence.

Challenges in the current landscape

Despite these benefits, 340B stakeholders face significant challenges:

• Manufacturer Rebate Strategies: Manufacturers have increasingly directed higher rebates for specialty medications to PBMs and insurers, leaving 340B entities with a smaller share of these discounts.
• Contract Pharmacy Restrictions: Manufacturers have increasingly limited 340B pricing for drugs dispensed through contract pharmacies, citing concerns over program abuse. They argue that entities profit from 340B discounts without ensuring patient savings. Providers, however, dispute this, emphasizing their commitment to program stewardship.
• Audits and Compliance: The Health Resources and Services Administration (HRSA) has increased audit efforts, requiring CEs and their pharmacy partners to maintain strict program compliance to avoid penalties.
• Financial Pressures: Specialty pharmacies operate within tight margins, and while 340B offers lower acquisition costs, reimbursement rates for many specialty drugs have been falling. PBMs and insurers often reimburse 340B-dispensed drugs at lower rates, further squeezing margins.

Policy and legislative developments

The 340B program faces scrutiny from lawmakers and regulators. Proposed legislation seeks to enhance transparency in how CEs use 340B savings, with potential changes to contract pharmacy oversight and patient eligibility regulations. Legal disputes over contract pharmacy restrictions and state laws aimed at prohibiting discriminatory reimbursement against 340B entities are also shaping the program’s future.

Opportunities for specialty pharmacies

Despite challenges, specialty pharmacies partnering with 340B providers have opportunities to advance patient care and grow their services. By building strong partnerships with CEs, specialty pharmacies can ensure continued access to essential medications at reduced costs. They can also provide valuable services, such as adherence programs, care coordination, and outcome tracking—key elements in value-based care models.

In addition, technology and data analytics represent a significant opportunity. As 340B grows in complexity, advanced data systems enable specialty pharmacies to streamline operations, track patient eligibility, and improve compliance efficiently.

Conclusion

The 340B program remains crucial for providing underserved populations with access to specialty medications and supporting CEs in their mission to deliver inclusive care. However, contract pharmacy arrangements, compliance challenges, and reimbursement pressures are intensifying. The future success of 340B and specialty pharmacy will hinge on stakeholders’ ability to adapt to legislative and regulatory shifts, legal developments, and market dynamics.

To read the full article, visit: The Evolving Impact of 340B on Specialty Pharmacy

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