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Specialty Pharmacy: Managing in an Ever-Changing Environment

June 2023 In recent years, increased scrutiny of the 340B Drug Pricing Program has put additional pressures on hospital systems and pharmacies as manufacturers impose restrictions on covered entities and contract pharmacies. While proponents of the program insist the cost savings generated help to provide care for under served communities and keep medications reasonably priced, critics have argued that the program is unfair to drug manufacturers, and that it allows healthcare organizations to profit from the discounts that they receive. As a result, there is a growing possibility that drug makers will be allowed to continue to impose tighter controls on the 340B program with devastating effects to the hospitals and pharmacies that rely on it.

Beginning in 2020, a small number of manufacturers began to restrict access to medications for contract pharmacies, since that time more than 20 manufacturers have imposed restrictions. While some manufacturers have increased administrative burden by requiring additional data submissions to prove compliance with program requirements, others have restricted access to products purchased at 340B prices to only covered entities and child sites of covered entities. In January of this year, the Third Circuit Court of Appeals upheld the right of manufacturers to limit where the discounted drugs are distributed. With three additional appeals pending, the future of contract pharmacies within the program is somewhat uncertain.

If manufacturers are allowed to continue to restrict access for contract pharmacies, it could have a significant impact on specialty pharmacies which rely on the program to help them keep their costs down. Tighter controls may create more difficulty for specialty pharmacies to access medications and the discounts they need, leading to increased cost for pharmacies and patients.

To protect themselves, specialty pharmacies should consider developing protective growth strategies which allow them to continue to provide high-quality care to their patients at a lower cost. Strategies which could be considered include:

  • Expanding their product offerings. Specialty pharmacies can expand their product offerings by adding new medications to their formulary. This will allow them to reach a wider range of patients, and it will also help them to offset any losses that they may experience due to tighter controls on the program.

  • Access to data. Specialty pharmacies can ensure they have visibility to data which provides actionable insight into pharmacy operations. For health system owned pharmacies, access to data could help specialty pharmacy leaders identify where patient leakage is occurring and provide valuable insight into operational inefficiencies.

  • Increasing their efficiency. Specialty pharmacies can increase their efficiency by streamlining their clinical workflows and automating their processes. While improving operations will support cost saving efforts, it will also allow them to provide better care to their patients.

  • Diversifying their revenue streams. Specialty pharmacies can diversify their revenue streams by developing new business lines. For example, implementing a telepharmacy program would allow specialty pharmacies to expand their reach to rural communities and serve a broader patient base.

By developing growth strategies, specialty pharmacies can continue to provide high-quality care to their patients at a lower cost and protect themselves from increasing drug costs, ensuring the most vulnerable patients continue to receive the care they need.

Tina Modi, MBA

Managing Director

Nashville 310-795-8241

Stacie Leutner, MBA


Milwaukee 262-527-8821


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