Drug manufacturer threats to the access of 340B drugs have risen in the past month, but NACHC offers advice to help health centers adjust to the changing environment.

Webinar Presenters:

  • Michael B. Glomb, Feldesman Tucker Leifer Fidell LLP
  • Jeff Allen, BKD
  • Scott Gold, BKD


In the past month, a handful of notable drug manufacturers have started implementing guidelines that subsequently scale back the 340B program, a program that allows health systems to capture savings from discounted drugs in order to provide low-income patients access to them. During the National Association of Community Health Center’s (NACHC) Finance Office Hours on Sept. 16, speakers provided community health centers with some counsel on how to adapt and survive during changes to the 340B program.


Drug Manufacturers Threatening 340B

The drug manufacturer Eli Lilly was among the first to cause a disturbance to the long-running program. As of Sept. 1, Lilly banned 340B hospitals from obtaining discounted drugs through a contract pharmacy, with the exception of insulin. Where the problem lies is that many of these hospitals do not have the resources to support an in-house pharmacy. According to the Government Accountability Office, approximately one-third of 340B hospitals rely on contract pharmacies to dispense discounted drugs.¹

In consequence, many low-income patients will no longer be able to afford their prescriptions, which, of course, can lead to worsening health outcomes.

AstraZenaca, another drug manufacturer, followed suit shortly after Lilly’s announcement.

In a similar vein, manufacturers Merck, Sanofi and Novartis are requiring the submission of non-Medicaid claims data, which speakers at NACHC’s webinar say are beyond the companies’ scope of entitlement.

Additionally, Kalderos, a tech company automating 340B pay, is supplying drug manufacturers with the technology to crack down on duplicate discounts.² Duplicate discounts arise when an item classified as 340B is also submitted for a Medicaid rebate, which forces the manufacturer to pay double in discounts. While Kalderos says its rebate model has providers in mind and is in compliance with the Health Resources and Services Administration (HRSA), the implications of the model bring into question the effect on poverty-level patients.


Adapting to the New 340B

While NACHC is actively advocating and lobbying government officials to intervene in this disruption, there are some things health centers can do in the mean time to prepare for the shift away from the 340B program.

According to Jeff Allen at the accounting firm BKD, the immediate next steps should include analyzing the financial impact this shift will have on your practice and patient population. His advice is to gather the health center’s board of directors to draft a long-term plan should contract pharmacy revenues not return to its previous state. Begin to look at where quality improvement could result in margin improvement.


Telehealth as Your Long-term Solution

Did you know that a full suite of telehealth services can help you decrease overall costs of care and ensure 340B specialty prescription savings are being captured by your health center? Firstly, telehealth takes a proactive, holistic approach to care. The use of Remote Patient Monitoring (RPM) also helps identify any major changes in a chronically ill patient’s health before they worsen, so their care plan can be adapted immediately. Telehealth services such as Transitional Care Management (TCM) also help newly discharged patients stay on track to recovery, preventing costly readmissions and decreasing the need for additional medications. Follow-up telehealth visits can even be pre-scheduled for your health center providers through this proactive telehealth model. Learn more about this process, here.

Telehealth is also useful in targeting the Quadruple Aim, which is meant to include provider satisfaction as an essential part of a value-based care work environment.


Allen also recommended analyzing whether there are community resources and partnerships available to help patients receive access to the medications they need. This can call for observing what has previously been done for patients in need outside the scope of the 340B program.

Lastly, Allen suggests taking these considerations into account and weigh against your health center’s unique needs:

  • Communicate the impact of 340B changes with providers, as they may have to adjust their script behaviors
  • Examine how your patients in need of specialty care will be impacted differently
  • Look at Rx contract language. Do you have a loophole with any of the medications? Consult a lawyer to fully explore your options.



¹ King, Robert. “Eli Lilly to Halt Sales of 340B Drugs to Contract Pharmacies with Exception of Insulin.” FierceHealthcare, 2 Sept. 2020, www.fiercehealthcare.com/hospitals/eli-lilly-to-halt-sales-340b-drugs-to-contract-pharmacies-exception-insulin.

² Kalderos. “Kalderos Launches 340B Pay, the Technology-Enabled Solution for 340B Rebates.” PRNewsWire, 25 Aug. 2020, www.prnewswire.com/news-releases/kalderos-launches-340b-pay-the-technology-enabled-solution-for-340b-rebates-301117963.html.