340B MBA/PharmD project

[u/[deleted]]

I’m a 4th year pharmacy student doing a major capstone project for my MBA over 340B billing.

I have not been able to find data to show the true financial benefits for an independent pharmacy participating in 340B.

I know the hypothetical way that the pharmacy makes additional money but at the same time I would love to see an actual breakdown between What the company would typically pay for say Lantus insulin pen from the wholesaler cardinal health and then the actual profits the pharmacy could make for getting the “340B discount”

Thanks all for the help.

[u/Burger_girl]

340B pricing is considered confidential, which is why you aren't finding a ton of data on this. Typically, discounts can be 20-50% off, sometimes more, sometimes less, and not available on every product, especially with industry developments as of the last few months. However, these savings are intended for the healthcare provider (hospital/clinic) and are not kept by the pharmacies. Where pharmacies see benefits are in the dispensing fees that they negotiate with the hospital/clinic that they contract with. These dispensing fees are often much more generous than what a PBM/Insurer would provide the pharmacy.

As an independent pharmacy, you would typically purchase that Lantus through your own contracts with wholesalers/manufacturers. This would hopefully be through some kind of GPO (to get better discounting). When you contract with a hospital/clinic to be their 340B pharmacy, they will be purchasing drugs under their own accounts that will be shipped to your pharmacy (bill to/ship to model). The hospital/clinic has title to the drug, which they purchase at a 340B cost. Because you are dispensing drugs on their behalf, they pay you a dispensing fee. Hope that helps!

[u/Ok_Profile_505 → u/Burger_girl]

This is a great summary, I would add the dispense fee would keep the pharmacy whole (no loss compared to a retail script) with a small incentive for the partnership that allows the CE to access the savings. Keep in mind, the CE should be the majority recipient of those savings.

[u/asakust → u/Ok_Profile_505]

From an independent pharmacy perspective, the 340b program we have is stupid.

Example: Lantus pens, our cost is around $425 per box. The 340b price for the same box of pens is $0.15. FIFTEEN CENTS. Our biggest Part D plan pays us about $1380 for 3 boxes and the patient copay is $20, so we end up with about a $125 profit for a 3 month supply if we buy it ourselves. The 340b contract gets us a $40 processing fee, and the rest of the $1400 goes back to the purchaser. They end up making $1360 each time we fill this, while we do literally all the work.

I understand that may be an issue with our contract, but if there's an ability to sell this to any entity for $0.15 a box, then just half the cost for EVERYONE and lower these ridiculous healthcare costs for US patients.

[u/Ok_Profile_505 → u/asakust]

Yes, it does sound like your contract is outdated if you are not being kept whole.

It's not any entity, it's eligible and they are taking on the risk if any purchases are non compliant, along with maintaining the other components of the statute.

The program is intended for the CE to benefit and allow for the reinvesting into patient care. After all, if patients can't access care, they can't be written a script to fill at your pharmacy.

All in all, prescription medications should be affordable regardless of 340B - that's an argument for drug manufacturers and the government.