Clearing the path to enter 340B
For retail independent pharmacists, participating in a 340B program can help increase access to affordable medications, strengthen the pharmacy’s relationship with its community and provide an alternative revenue stream. But the opportunity — in which pharmacies dispense drugs for such covered entities as hospitals and clinics that are able to purchase certain outpatient drugs at a discounted price — also can pose a host of administrative and logistical hurdles.
[caption id="attachment_589871" align="alignright" width="150"]
Daniel Neal, director of 340B product and service marketing at Cardinal Health[/caption]
However, Daniel Neal, director of 340B product and service marketing at Cardinal Health, said that being educated before embarking on a 340B partnership to fully understand the impact it will have on how a pharmacy business functions is the main pathway to success.
“The first thing I always stress when I’m talking to a pharmacy owner is to take the time to educate yourself about this program before jumping into it, because it is rather complicated,” he said. “A lot of it initially may seem counterintuitive to someone who's not familiar with it.”
He noted that financial modeling can be beneficial to forecast the financial implications of an agreement, and that the main source of revenue in these agreements, called a dispensing fee, differs from the dispensing fees pharmacists might be accustomed to, both in their amount and their source — namely, the covered entity. Neal stressed the importance of a pharmacy setting a dispensing fee that will properly compensate them for the work they do, revisiting it as needed.
Additionally, he said that inventory management often poses a challenge due to the nature of the partnership, in which the covered entity purchases the drugs, but pharmacies dispense them. The requirements that accompany maintaining a parallel inventory, whether physical, replenishment or a hybrid, alongside the pharmacy’s existing inventory can pose a difficulty, as can ensuring claim amounts are accurate — particularly from a personnel and infrastructure standpoint.
“While a lot of 340B models will pitch themselves as turnkey, the reality is for the program to be successful, it will require the pharmacy to have ongoing involvement,” Neal said. In particular, pharmacies are tasked with ensuring their 340B claim amounts are accurate to prevent inadvertently passing through dollars that are not in concert with the adjudicated amount. Pharmacies also may find themselves asked to play a role in “tagging” claims for certain payers, especially Medicaid managed care plans.
Recognizing that entering a 340B partnership can be a daunting task for independent pharmacists, Neal noted that Cardinal Health has resources in place for its customers.
“Cardinal Health is very aware of the needs of our retail independent pharmacies, including those that are considering or actively participating in 340B, so we’re always looking to understand how we might meet as many of their needs as possible,” Neal said, noting that Cardinal Health has a dedicated team of 340B account specialists who can assist with distribution contracting elements, licensure questions and account integration setup.
In an effort to further support its retail independent customers working in the 340B space, Cardinal Health’s Retail Pharmacy Marketing team collaborated with ProviderPay to introduce 340B Direct. This service, being introduced to retail pharmacists at Cardinal Health RBC, is intended to help guide pharmacy owners through the 340B process as efficiently and correctly as possible.
Neal said the service will help pharmacy owners go beyond the implementation process and continue to assist them with their 340B model, as well as navigate marketing their services to 340B covered entities who might be in the market for a pharmacy partner.
“Many of the covered entities I interact with express interest in and even their individual preference for working with local community independent pharmacies for contract pharmacy models,” Neal said. “I think a solution like 340B Direct might bring some organization and consistency to how our independent pharmacy customers interact with the covered entities that will bring a little more standardization, clarity and confidence.”
Click here to learn more about how this service can help you implement 340B in your pharmacy. If you’re attending Cardinal Health RBC 2018, you can visit the 340B Direct booth on the show floor.
[caption id="attachment_589871" align="alignright" width="150"]
Daniel Neal, director of 340B product and service marketing at Cardinal Health[/caption]However, Daniel Neal, director of 340B product and service marketing at Cardinal Health, said that being educated before embarking on a 340B partnership to fully understand the impact it will have on how a pharmacy business functions is the main pathway to success.
“The first thing I always stress when I’m talking to a pharmacy owner is to take the time to educate yourself about this program before jumping into it, because it is rather complicated,” he said. “A lot of it initially may seem counterintuitive to someone who's not familiar with it.”
He noted that financial modeling can be beneficial to forecast the financial implications of an agreement, and that the main source of revenue in these agreements, called a dispensing fee, differs from the dispensing fees pharmacists might be accustomed to, both in their amount and their source — namely, the covered entity. Neal stressed the importance of a pharmacy setting a dispensing fee that will properly compensate them for the work they do, revisiting it as needed.
Additionally, he said that inventory management often poses a challenge due to the nature of the partnership, in which the covered entity purchases the drugs, but pharmacies dispense them. The requirements that accompany maintaining a parallel inventory, whether physical, replenishment or a hybrid, alongside the pharmacy’s existing inventory can pose a difficulty, as can ensuring claim amounts are accurate — particularly from a personnel and infrastructure standpoint.
“While a lot of 340B models will pitch themselves as turnkey, the reality is for the program to be successful, it will require the pharmacy to have ongoing involvement,” Neal said. In particular, pharmacies are tasked with ensuring their 340B claim amounts are accurate to prevent inadvertently passing through dollars that are not in concert with the adjudicated amount. Pharmacies also may find themselves asked to play a role in “tagging” claims for certain payers, especially Medicaid managed care plans.
Recognizing that entering a 340B partnership can be a daunting task for independent pharmacists, Neal noted that Cardinal Health has resources in place for its customers.
“Cardinal Health is very aware of the needs of our retail independent pharmacies, including those that are considering or actively participating in 340B, so we’re always looking to understand how we might meet as many of their needs as possible,” Neal said, noting that Cardinal Health has a dedicated team of 340B account specialists who can assist with distribution contracting elements, licensure questions and account integration setup.
In an effort to further support its retail independent customers working in the 340B space, Cardinal Health’s Retail Pharmacy Marketing team collaborated with ProviderPay to introduce 340B Direct. This service, being introduced to retail pharmacists at Cardinal Health RBC, is intended to help guide pharmacy owners through the 340B process as efficiently and correctly as possible.
Neal said the service will help pharmacy owners go beyond the implementation process and continue to assist them with their 340B model, as well as navigate marketing their services to 340B covered entities who might be in the market for a pharmacy partner.
“Many of the covered entities I interact with express interest in and even their individual preference for working with local community independent pharmacies for contract pharmacy models,” Neal said. “I think a solution like 340B Direct might bring some organization and consistency to how our independent pharmacy customers interact with the covered entities that will bring a little more standardization, clarity and confidence.”
Click here to learn more about how this service can help you implement 340B in your pharmacy. If you’re attending Cardinal Health RBC 2018, you can visit the 340B Direct booth on the show floor.