The Irony of the 340B Program

Since 1992, qualifying organizations have been able to participate in the discount drug program known as 340B. Through this program, covered entities are able to receive significant discounts and potentially save millions on pharmaceutical reorders to benefit their indigent populations. With the long-standing program has come an increase in HRSA government audits to regulate participants and assure that providers meet intended guidelines. 

These audits have influenced an increase in the number of vendors that offer, among other services, the help and expertise to prepare for and sufficiently prove compliance during a potential audit. Ironically, providers who qualify for the 340B cost savings are now having to spend money to prepare for audits from the very organization that authorized their participation in the program in the first place. After all, you can’t best use an umbrella unless there is some rain to go with it!

As discussed in the 2014 KLAS report 340B Management Systems: Relieving the Audit Pressure, 340B management systems certainly provide more than just audit preparation. These solutions help split drug purchases to give providers the opportunity to maximize discounts. They also provide analytics and internal reporting tools and help cross-reference NDC codes to billing codes. Although these additional tools are helpful, the audit-preparation features certainly seem to be driving the market energy right now.

Providers who align with the intended purposes of the program will benefit from the additional functionalities offered from today’s 340B vendors. As healthcare providers continue to seek cost-saving measures, 340B will likely continue to be a highly impactful program that can benefit many patients. Will ongoing audits uncover expectations of more regulation? In the future KLAS will look to speak with more providers who have gone through a HRSA audit so they can share their experiences with others. Please share your thoughts below.