Abstract
Manufacturer restrictions on 340B discounts through contract pharmacies: A qualitative analysis
Nicole Quinones, MPH and Sayeh Nikpay, PhD, MPH
University of Minnesota School of Public Health, Minneapolis, MN
APHA 2024 Annual Meeting and Expo
The 340B drug discount program is a safety-net subsidy program designed to help participants, called covered entities (CE), lower drug costs. The program also allows CEs to generate an unrestricted subsidy to fund safety-net care when discounted drugs are used on patients with insurance. The program has grown as both the number of CEs and the number of pharmacies–both in-house and contract pharmacies (CP)–through which 340B-discounted drugs can be dispensed. In response to this growth, pharmaceutical manufacturers began posting notices that restrict discounts through CPs. Prior to the notices CEs were allowed to have an unlimited number of CPs. Now manufacturers have limited CEs to one location for those without an in-house pharmacy. CEs with an in-house pharmacy must make that pharmacy their CP in most cases. In this study, we used content analysis to review manufacturer restrictions through CPs and describe common features across manufacturers restrictions. We identified 52 letters posted by 29 manufacturers between the 4th quarter of 2020 and the first quarter of 2024. Among these letters, 30.8% (n=16) required that the designated contract pharmacy be within 40 miles of the covered entity’s parent site, 36.5% (n=19) allowed CEs to have one contract pharmacy even if they had an in-house pharmacy, and 69.2% (n=36) exempted Federal grantees from restrictions. Additionally, more manufacturers are revising their mandates to exclude federally qualified health centers (FQHCs) (36%), which disproportionately provide care for underserved communities. These 29 manufacturers represented 53.6% of global pharmaceutical revenue in 2022.
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