A Summary of Final Contract Pharmacy Guidelines

By: Jordan Mummau, CIS Compliance Associate
jordanmummau@cis-partners.com

The proposed guidelines for contract pharmacy services that had once been limited to the Alternative Methods Demonstration Project (AMDP) program have now been revamped to utilize multiple contract pharmacies and suggested contract pharmacy provisions. This final notice, put in place by the Health Resources and Services Administration (HHS), comes after many of the covered entities participating in the 340B program suggested that their delivery of patient care would be more effective with a multiple contract pharmacy option. The guidelines state, “It would be a significant benefit to patients to allow the use of more easily accessible, multiple contract pharmacy arrangements by covered entities.”[i] Ultimately, this would allow the program to reach patients who otherwise would not have had access to a covered entity or if a covered entity did not have the resources ‘in-house’ to administer proper care to a patient.

Covered entities are permitted to use multiple pharmacies as long as they remain in compliance with previously established guidance. Auditable records must be maintained to demonstrate this compliance, and records must be held for as long as required by federal, state and local law. Covered entities are responsible for maintaining compliance with these requirements in order to prevent covered drugs from being dispersed to ineligible individuals, and to guard against situations where a drug is subject to both the 340B discount and a Medicaid Rebate claim. It is important to note that the use of a contract pharmacy is voluntary; thus, each covered entity should determine whether or not utilizing multiple contract pharmacies improves upon their current delivery system.

Essential Covered Entity Compliance Elements[ii]:

1. The covered entity will purchase and maintain the title to the drug while assuming responsibility for establishing its price
2. An agreement between a covered entity and a contracted pharmacy will specify the responsibility of both parties to provide comprehensive pharmacy services
3. It is the responsibility of the covered entity to inform the patient of his or her freedom to choose a pharmacy provider
4. The contracted pharmacy may provide other services to the covered entity or its patients (e.g., home care, reimbursement services)
5. The contracted pharmacy and covered entity will adhere to all federal, state, and local laws and requirements
6. The contracted pharmacy will provide the covered entity with reports consistent with customary business practices (e.g., quarterly billing statements, status reports, etc.)
7. The contracted pharmacy, with the assistance of the covered entity, will establish and maintain a tracking system suitable to prevent diversion of section 340B drugs to ineligible individuals
8. The contracted pharmacy and covered entity will develop a system to verify patient eligibility, as defined by HRSA guidelines
9. Neither party will use drugs purchased under section 340B to dispense Medicaid prescriptions unless the covered entity, the contracted pharmacy and the State Medicaid agency have established an arrangement to prevent duplicate discounts
10. The covered entity and contracted pharmacy will identify the necessary information to meet its ongoing responsibility of ensuring compliance
11. Both entities understand that they are subject to audits by outside parties
12. Upon written request to the covered entity, a copy of the contracted pharmacies service agreement will be provided to the Office of Pharmacy Affairs

[i] http://edocket.access.gpo.gov/2010/pdf/2010-4755.pdf

[ii] http://edocket.access.gpo.gov/2010/pdf/2010-4755.pdf