Limitations on Contracting with Several Pharmacies: Ensuring Compliance in the 340B Drug Pricing Program

Contracting with multiple 340B pharmacies can offer advantages for covered entities participating in the 340B Drug Pricing Program. It can enhance medication access, improve patient care, and strengthen the overall healthcare services provided. However, to ensure compliance with Health Resources and Services Administration (HRSA) guidelines and maintain the program's integrity, covered entities must be mindful of specific limitations and considerations. In this blog post, we will explore the key limitations and best practices for managing multiple pharmacy relationships under the 340B program.

HRSA Guidance on Multiple Contracts

HRSA provides essential guidance on contracting with multiple pharmacies under the 340B program to prevent potential abuse or misuse of discounted medications. Covered entities must carefully review and adhere to these guidelines to maintain program eligibility and prevent any unintended violations.

One of the key limitations is that covered entities should only contract with pharmacies that meet HRSA's definition of a "contract pharmacy." These pharmacies must comply with all relevant state and federal regulations, including pharmacy licensure requirements and Drug Enforcement Administration (DEA) registration. Additionally, contract pharmacies must agree to abide by all 340B program rules and regulations.

Balancing Multiple Pharmacy Relationships

While contracting with multiple pharmacies can enhance medication access and patient care, covered entities must carefully manage these relationships to avoid potential challenges. Balancing multiple pharmacy contracts requires effective communication and coordination between the covered entity and each pharmacy partner.

Covered entities should establish clear lines of communication and reporting mechanisms with each pharmacy to ensure transparency in medication purchasing, inventory management, and program compliance. This can help prevent duplicate discounts and ensure accurate reporting and recordkeeping for HRSA audits.

It is also essential to assess the covered entity's capacity to manage relationships with multiple pharmacies effectively. The administrative burden of handling multiple contracts and monitoring compliance can be significant. Therefore, covered entities should have robust systems in place to manage the complexities associated with multiple pharmacy partners.

Ensuring Compliance with 340B Program Requirements

Compliance with 340B program requirements is paramount when contracting with several pharmacies. Covered entities must ensure that all contracted pharmacies adhere to the program's rules and regulations to prevent any potential violations.

One area of particular attention is the prohibition of diversion. Covered entities must take measures to prevent the diversion of 340B drugs, ensuring that discounted medications are used exclusively for eligible patients within the covered entity's program scope.

Additionally, covered entities should be cautious about potential overlapping services or medications provided by multiple pharmacies. Careful consideration should be given to avoid redundancy in services or potential conflicts with existing pharmacy arrangements.

Maintaining Accurate and Timely Reporting

Covered entities contracting with multiple pharmacies must be diligent in reporting program data to HRSA. Accurate and timely reporting is crucial for maintaining program eligibility and demonstrating compliance during audits.

Covered entities should ensure that each contracted pharmacy provides complete and accurate 340B program data, including drug utilization and patient eligibility information. This data is critical for HRSA to monitor program integrity and assess the impact of the 340B program on patient care and medication access.


Contracting with several pharmacies under the 340B Drug Pricing Program can provide valuable benefits, such as expanded medication access and improved patient care. However, covered entities must be mindful of the limitations and challenges associated with managing multiple pharmacy relationships.

By adhering to HRSA guidelines, maintaining transparent communication, and ensuring compliance with program requirements, covered entities can effectively navigate the complexities of contracting with multiple pharmacies while upholding the integrity of the 340B program. Strategic management of these relationships can maximize the program's benefits and enhance healthcare services for the underserved populations that the program aims to support.

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