March 340B Insider


    Welcome to the March edition of RxStrategies 340B Insider, a concise communication to provide a quick highlight of updates from RxStrategies’ view.




    RxStrategies’ Increased Presence at 340B Coalition Winter Conference

    RxStrategies continues to work closely with SNHPA, as one of two Pinnacle Leader Corporate Partners, supporting educational events, such as the recent 340B Coalition Winter Conference.

    In addition to the general conference support, RxStrategies sponsored a preconference event for our key clients in attendance, providing an opportunity for our clients to interact and share best practice ideas with other industry leaders (SNHPA, hospitals, retail pharmacies) and stakeholders in the 340B marketplace.

    RxStrategies also developed and introduced enhanced booth and related materials, at the 340B Coalition Winter Conference in San Francisco. Following the results of the 2014 market survey, RxStrategies rebranded the organization with updated marketing materials to reflect the enhanced 340B client experience, as well as provide an updated look to our exhibit booth.




    340B Coalition Winter Conference in San Francisco Highlights

    Opening comments by Cmdr. Krista Pedley included remarks on the mega–guidance, regulations, audits and orphan drug regulations. The complete speech is recorded and accessible at

    RxStrategies’ view on Pedley’s comments are as follows:

    • Mega-guidance will be forthcoming this summer, with further patient definition guidance and additional input on Medicaid managed care.
    • HRSA has made some progress working with manufacturers on making orphan drugs available at 340B prices. Roughly 13 manufacturers are not honoring HRSA orphan guidance, as of February 2015. 

    Winter Conference Fundraiser

    Close to $10,000 was raised by the participants in the 340B Coalition Charity Fun Walk for San Francisco General Hospital Foundation. Team RxStrategies was a participating sponsor, finishing the fun walk in under 45 minutes, just before the rain. The scenic Embarcadero was the location for the three-mile walk. SNHPA selects a local charity each year to raise funds for and promotes awareness of the work that is being done locally. San Francisco General, a participant of the 340B Program, has a long-standing history and dedication to serving those in the safety net community.

    340B PAC

    As an active 340B PAC advisory board member, RxStrategies is committed to working with other industry leaders to promote the integrity and longevity of the 340B Program. We are proud to participate and enhance the knowledge of legislators to the critical nature of the program and the needs of patients involved.

    There are a number of significant political events planned and in process to support of 340B, via the PAC. RxStrategies will actively participate in the same topics discussed at the 340B Coalition Winter Conference’s PAC session. Expect mega-guidance topics to be released June 2015, including the 11-digit NDC replenishment requirement, tightening of the patient definition and the external audit requirement.

    The 340B PAC is dedicated to becoming much more active in 2015. We would encourage each of you to be proactive in your support of the 340B Program and the PAC. Several of our clients provided powerful op-eds and letters to the legislature, which were very helpful for the program overall. We have templates of sample letters you can use in support of the 340B Program. If you would like to participate in the 340B PAC or receive copies of templates at your house with your Senate representative listed, please contact




    RxStrategies Adds New Retail Partnership

    Safeway 340B Direct has been added to the lineup of retail pharmacies that are affiliated with RxStrategies 340B Plus program. For information on adding the Safeway family of stores to your program, contact

    New Implementation Guidelines Available

    New Implementation Guidelines for our clients are available to help in the onboarding and implementation process of the 340B Program. These guidelines provide a concise review of all the items needed to register and activate the contracted pharmacies and wholesaler accounts.


    Screen Shot 2015-03-04 at 11.56.17 AM


    340B University

    Do you know there are 29,752 registered sites eligible for the 340B Program, 14,533 of these are non-hospital sites and 16,257 are unique contract pharmacies? As the number of sites and programs expand, the need for information and guidance for the program also grows. Apexus, the contracted prime vendor for the 340B Program, offers 340B University as an in-depth educational program designed to meet the practical needs of 340B PVP participants and other program stakeholders.

    RxStrategies attended the most recent 340B University, and has five graduates to date. If you have not had the opportunity to attend 340B University, it is recommended that you review the 340B Prime Vendor website for dates and times. For more information, visit

    Topics covered in the training include statutory ceiling price calculations, fundamentals in implementing a compliant pharmacy program and hands-on training with tools and resources available to assist with program integrity. Recent 340B University programs feature a broad range of educational sessions, including:

    – 340B Basics—Introduction to the 340B Drug Pricing Program
    – Program Integrity and Audits
    – Implementation/Policy-Contract Pharmacy Implementation and Mixed-Use Setting Compliance
    – Pricing-Calculation and Integrity Considerations
    – 340B and Medicaid: Overview on Billing and Duplicate Discount Policies

    Take advantage of the opportunity for hands-on, practical advice to help with 340B Program implementation. Specially designed breakout sessions help you enhance program integrity by learning from industry leaders and networking with peers!




    HRSA’s 340B Drug Pricing Program Recertification

    HRSA requires all 340B-covered entities to annually recertify their program information in order to continue participation in the Federal 340B Drug Pricing Program. Recertification continues through March 11, 2015.
    It is critical that health centers recertify before the March 11, 2015 deadline, in order to continue participating in the 340B Program. Recertify your health center’s 340B information.

    HRSA Publishes Medicaid Exclusion File Clarification

    On December 12, 2014, HRSA published a clarification on the use of the 340B Medicaid Exclusion File, replacing an earlier release on the same topic from February 7, 2013. The following are some key points of the new release:

    1. The policy release applies only to Medicaid fee-for-service, but HRSA recognized the need to address the role of the covered entity in duplicate discount prevention under Medicaid managed care.
    2. HRSA’s role in the oversight of duplicate discount prohibition ensures the covered entities have accurate Medicaid billing practices reflected in the Medicaid Exclusion File. State Medicaid agencies should work with CMS regarding their role in the prevention of duplicate discounts.
    3. During an audit, HRSA will not contact the state Medicaid agency to determine whether a duplicate discount occurred.
    4. HRSA and CMS collaborated to establish 340B Medicaid Exclusion File as the official data source to support duplicate discount prevention. However, HRSA recognized that some covered entities and states have worked together to develop their own models for duplicate discount prevention.


    HRSA Communications Regarding Independent Audit

    HRSA’s expectation for independent audits for contract pharmacy relationships is clear. The following is a summary of HRSA communications in association with contract pharmacy guidelines or updates.

    1. March 2010: “Annual audits performed by an independent, outside auditor with experience auditing pharmacies are expected, although the exact method of ensuring compliance is left up to the covered entity. The covered entity must have sufficient information to ensure it is meeting that responsibility. Independent audits are particularly valuable where the covered entity utilizes multiple pharmacy options. They should follow standard business practices for audits, including audit trails provided by the entity to the auditor, and use of standard reports. The precise methodology utilized to ensure compliance and obtain the necessary information is up to the covered entity given its particular circumstances and, for example, might include spot audits where the system in place permits.”
    2. February 2014: “All covered entities are required to maintain auditable records and are expected to conduct annual audits of contract pharmacies that are performed by an independent auditor. HRSA conducts audits to ensure covered entities are appropriately providing oversight of their contract pharmacy arrangements. … If HRSA finds a covered entity providing no oversight of its contract pharmacy arrangement, this is a violation of program requirements and HRSA will no longer permit the participation of that contract pharmacy arrangement.”
    3. October 2014: “HRSA recommends that each covered entity establish and document criteria that demonstrate compliance for the following requirements…How the covered entity provides oversight (e.g., annual audit or other mechanism) of the 340B drugs dispensed by the contract pharmacy.”
    4. November 2014: HRSA lists audit findings on its website, and as recently as last month, this audit finding appeared: “Entity did not provide contract pharmacy oversight.” Although the specifics are not listed in conjunction with this audit, conducting independent audits is likely associated with lower risk of this particular finding.


    Health Infrastructure Investment Program (HIIP) FOA 

    HRSA has released the Fiscal Year 2015 HIIP Funding Opportunity Announcement (FOA). Approximately $150 million in ACA funding will be made available to support 150-175 awards for existing Health Center Program grantees to increase their patient capacity and to provide additional comprehensive primary and preventive health services to medically underserved populations through the alteration/renovation, expansion, or construction of a facility. Applications are due to by April 21, 2015. Supplemental information is due in EHB by May 21, 2015.




    340B Related Articles and Responses Continue

    Becker’s Hospital Review (Ellison, 12/8) cites a recent white paper by the Berkeley Research Group in discussing the coming expansion of the 340B Program: “The 340B Program has experienced significant growth over the last several years, with total purchases increasing from $1.1 billion in 1997 to more than $7 billion in 2013. Continuing with the growth trend, total purchases are expected to increase to more than $16 billion by 2019.”

    The report, “Growth of the 340B Program: Past Trends, Future Projections” (Vandervelde, 11/14), concludes, “The 340B Program has experienced substantial growth during the last decade and there is every indication that this growth will continue in the next five years. Increased participation by DSH hospitals, hospital acquisitions of community oncology practices, expansion of contract pharmacy arrangements, and changes made by the Affordable Care Act all have contributed to this historical growth and will continue to drive growth in the future.”

    In “AHA sets the record straight on report about 340B Program” (AHA News Now, 12/8), AHA reports that the “Berkley Research Group report is the latest attempt by the pharmaceutical industry to disparage the 340B Drug Pricing Program, which has a proven track record of helping poor patients and vulnerable communities…The BRG report relies on questionable data that cannot be replicated, draws incorrect conclusions in a number of areas and does not paint an accurate picture of the 340B Program.”

    Hospital Association Asks Judge to Throw Out Drug Industry Lawsuit

    In a friend–of–the-court brief, SNHPA, America’s Essential Hospitals and the NRHA asked a court to dismiss a suit filed by PhRMA attempting to prevent rural and cancer hospitals from accessing 340B pricing on orphan drugs, when they are used for common conditions.  If you have questions, contact Jeff Davis at



    Question: What are the audit and compliance requirements under the contract pharmacy guidelines?

    Answer: The covered entity must have sufficient information to ensure ongoing compliance and the timely recognition of any 340B Program compliance problem at all contract pharmacy locations. The covered entity remains responsible for the 340B drugs it purchases and dispenses through a contract pharmacy. All covered entities are required to maintain auditable records and provide oversight of their contract pharmacy arrangements.

    HRSA expects that covered entities will use independent audits to fulfill their ongoing obligation of ensuring 340B Program compliance. Any 340B Program violations found during internal or independent audits must be disclosed to HRSA, along with the covered entity’s plan to address the violation. This information should be mailed to Health Resources and Services Administration, Office of Pharmacy Affairs, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857.

    Additionally, HRSA audits of covered entities include contract pharmacies. A contract pharmacy will be removed from the 340B Program if the covered entity is not providing oversight of its contract pharmacy arrangement.


    Question: Can an entity ever replenish at the 9-digit NDC level?

    Answer: As standard practice, 340B-covered entities should replenish at the 11-digit NDC level. In exceptional circumstances, when 11-digit replenishment is not possible, a covered entity may replenish at the 9-digit NDC level, if the covered entity maintains auditable records demonstrating that the appropriate amounts are replenished from the same manufacturer, regardless of the package size. Nine-digit NDC replenishment should not be part of standard operations. A covered entity must maintain policies and procedures and auditable records that demonstrate a compliant replenishment model.