340B Contracted Pharmacies

Refer to the Enrollment section for information about how pharmacies enroll in Medicaid.

Many 340B covered entities elect to dispense 340B drugs to clients through contract pharmacy services. The 340B covered entity signs a contract with one or more pharmacies to provide these prescription services. A single covered entity with more than one 340B-eligible pharmacy may have individual contracts for each location or include multiple locations within a single pharmacy services contract. Covered entities are responsible for ensuring compliance of their contract pharmacy arrangement(s) with all 340B Program requirements.

The HRSA Contracted Pharmacies Database must include all contracted pharmacies associated with the covered entity. The covered entity is responsible for compliance with their contract pharmacy arrangement. Refer to the Provider Responsibilities section below for more information.

Covered entities can purchase, receive, and pay for drugs but request that the drugs ship directly to contracted pharmacies.

Refer to the "Notice Regarding 340B Drug Pricing Program - Contract Pharmacy Services" printed in the Federal Register (Vol. 75, number 43, pages 10272-9, March 5, 2010) at https://www.govinfo.gov/content/pkg/FR-2010-03-05/pdf/2010-4755.pdf for more information about the operation and compliance of contract pharmacies.

HRSA Audit Requirements

All covered entities must maintain auditable records and conduct annual audits of contract pharmacies. Independent outside auditors should review their compliance. The covered entity should disclose the finding to HRSA along with the covered entity's plan to address the finding. Refer to the HRSA website at https://www.hrsa.gov/opa/program-integrity/ or the specific MCO for its contract requirements for more information.

Annual HRSA Recertification

HRSA requires covered entities to annually recertify their eligibility to remain in the 340B Program and continue purchasing covered outpatient drugs at discounted 340B prices. As part of the recertification process, entities should ensure the following:

  • The HRSA database includes the 10-digit National Provider Identifier (NPI) and 6-digit HHSC-issued Medicaid vendor number
  • The entity answered "Yes" to the billing question on the Medicaid contract, "Will you bill Medicaid for drugs purchased at 340B prices?", if you plan to share the 340B savings with Medicaid
  • The HRSA quarterly Medicaid Exclusion file includes each of the entity's correct names and physical addresses