Trends in the 340B Management Market

The 340B program is a significant driver of savings and improved profit margins for health systems—for many organizations, the inclusion of a 340B program can even be the factor that makes them financially viable. With increasing complexities to the program due to added drug manufacturer restrictions and the possibility of additional government legislation, healthcare organizations are relying on their 340B management systems and vendors for tools and expertise in navigating the space.

KLAS recently published a report on customer satisfaction with these 340B management systems, specifically examining which solutions are being used by different customer types, customers’ ability to find savings and ROI, the strength of vendor support, and guidance in managing evolving challenges in the space. Read on for some trends and nerve points for current customers of 340B management systems.

Drug Manufacturer Restrictions Are a Major Pain Point

340B programs are meant to help drive savings for covered healthcare organizations—so a consistent pain point for these organizations is restrictions from drug manufacturers that make finding success with their 340B program more complex and difficult. While healthcare organizations acknowledge that these restrictions are outside of the 340B management vendors’ control, and while expectations from organizations vary, there remains an overall consensus that 340B management vendors should be doing more to help healthcare organizations navigate the drug manufacturer restrictions.

In this report, we asked respondents to rate their satisfaction with their vendor’s efforts to navigate these restrictions (seen in chart below). All vendors are noted for providing consistent email communication when new drug restrictions come out, and there are a few vendors who stand out for providing additional services and support. PharmaForce, RxStrategies, and Verity Solutions all receive the highest satisfaction score in this area. PharmaForce and RxStrategies are both highlighted for their tool that automatically blocks the purchasing of the restricted drugs, and respondents appreciate that automation. And Verity Solutions is noted for their strong support and regular calls that aid healthcare organizations in navigating the restrictions.  

Despite the strengths of a few vendors that have led to a higher satisfaction in this area, there is a lot of room for vendors to continue improving their tools and service to better help their customers—demonstrated in the highest scores sitting at 7.3 on a 1–9 scale. We hope to continue to track this metric to see how customer satisfaction might change as restrictions continue to be placed and products and vendors evolve.

Effects of Customer Base Expansion

As vendors look to expand their customer base, some look at customer demographics they have not normally focused on (e.g., expanding services beyond ambulatory care into acute care or vice versa), and several vendors measured in this report have taken on such. When these expansions happen, customers often note the resulting growing pains, which can lead to potential drops in customer satisfaction. Expansion to new customer types is inevitable, but 340B management vendors need to be cautious while scaling to ensure that (1) their current customer base is still well supported and (2) they have the expertise necessary to provide high-quality service for the new customer base. Read the report for more details on how customer satisfaction has been affected by vendor expansion.

Purchasing Optimization Solutions Can Positively Impact 340B Programs

Outside of the context of this report, there has been a rise in the use of pharmacy purchasing optimization solutions in recent years, further helping health systems decrease their spending on medication. (See KLAS’ recent report on these solutions.) Some of these solutions affect a healthcare organization’s ability to leverage the 340B program effectively, and customer satisfaction with 340B management systems can be positively impacted by the use of a purchasing optimization solution. For example, Verity Solutions’ purchasing optimization solution, Verisave, is often highlighted in discussions about the vendor’s 340B management system, as the use of these systems in conjunction drives significant cost savings.

Continuing to Monitor Litigation and Restrictions

As time goes on, the biggest dictator for how the market for 340B management systems will change is likely going to be the balance found between government intervention and drug manufacturer restrictions. There is current litigation determining the legalities behind whether the government can allow or block certain restrictions, and energy in this space may likely hinge on what the courts end up ruling. In addition to looking at technology advancements and support, KLAS will continue to monitor how government litigation and further restrictions affect customer satisfaction and market energy. Read the report for more insights on the current standings of the market and customer satisfaction.

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