The 340B discount drug program allows eligible hospitals and clinics to purchase medications at discounted rates, enabling them to better serve and provide access to medications for low-income patients. While the program typically saves facilities an average of 25% to 50% off the average wholesale price, complying with the program’s auditing, inventory management, and tracking requirements can be challenging.
The Medical University of South Carolina (MUSC) is a 700-bed academic medical center located in Charleston with 34,000 inpatient admissions per year. While eligible for 340B-priced drugs, MUSC did not take advantage of the program for approximately 15% of eligible patients prior to 2009. Simply speaking, there was not enough staff to adequately face the challenge of maintaining compliance by keeping separate stocks of drugs, and additionally, pharmacy administration expressed concerns about the holding costs of drugs. Thus, the facility could not realize these significant 340B savings.
However, in 2009, hospital administration challenged all departments to cut 5% of our budgets. As part of pharmacy’s cost reduction program initiative, pharmacy leadership began evaluating various 340B software programs that would allow us to take full advantage of 340B savings throughout all our facilities where we had a mix of inpatients and eligible patients in procedure areas, the emergency room, and other outpatient locations.
Choosing and Implementing 340B Management Software
As manager of pharmacy support and operating room services, I was tasked with evaluating the available software programs and choosing one that would best fit the goals of our facilities. Various programs were evaluated, but based on the system we had in place, we decided to go with a single-source solution and purchased our wholesaler’s 340B software, which was then implemented throughout all our locations.
Because our facilities were already using products from a single vendor, implementing the 340B software was straightforward and accomplished quickly. Staff was familiar with the ordering procedure, and adding the 340B software to the process was accomplished simply by clicking an additional button on the screen when placing our daily orders.
To properly familiarize staff with the change in the ordering process, pharmacy held multiple educational sessions with pharmacists and pharmacy technicians to demonstrate the process. For example, if we are using a 100-tablet bottle of Lipitor, the software tracks the number of doses dispensed for eligible patients and when the package size is fulfilled the medication is available to be purchased under the 340B price. If we did not have the software, these 340B-eligible medications would need to be accounted for manually using two separate physical stocks. The software tracks the available drugs and makes keeping two stocks unnecessary, while maintaining compliance with 340B requirements.
Enhance Tracking and Compliance
A 340B dispensing report can be generated in real time whenever necessary. Initially we reviewed it weekly, but now it is reviewed once each month to ensure drugs are being ordered correctly. Since the initial training session, errors have been rare. The software has the capability to provide detailed dispensing reports at any time if a discrepancy is suspected. When regulatory changes in the 340B program are made, our vendor updates the 340B software; as few program changes have occurred, these updates are infrequent.
Concurrent with implementing the 340B software we recognized that linking our pharmacy information system and our electronic ordering system would be necessary to ensure efficiency updating drug prices on a monthly basis. Without this link, a facilities’ information services team member was required to go into each system separately to validate the accuracy of the 340B prices, as they change often. The information services team audits both programs monthly as well as quarterly, which added a significant amount of time to their already busy schedules.
To remedy this duplication of workload, we purchased additional software that links our pharmacy information system with our ordering system and updates drug prices electronically. As a result of linking the two systems, we realized an 80% decrease in manual labor time reviewing reports and updating 340B pricing and medication package sizes, allowing staff to focus instead on other important initiatives, including developing our CPOE process and enhancing the pharmacy information and BCMA systems.
The 340B software has had a large impact on the organization as a whole and on the perception of the pharmacy department in particular. Using the 340B software significantly contributed to pharmacy meeting the goal of cutting our budget by 5%. In the first year after implementation, the software saved the facility $1.4 million. We present our savings to administration every month, and all key stakeholders have been pleased with the results. Additional benefits include the enhanced documentation and tracking provided by the software and the increased peace of mind that comes as a result of knowing that our facility is in compliance with all 340B requirements.
Implementing 340B software allowed MUSC to save considerable funds in the first year of use, and these cost savings have been amplified by the technology’s improved auditing, tracking, and inventory management capacity. Although 340B is one of MUSC’s most valuable cost savings programs, adhering to its regulations can be time consuming and complex. 340B software has allowed our facility to realize additional savings and provided hospital leadership with improved confidence that our facility remains in compliance.
Christopher Fortier, PharmD, is the manager of pharmacy support and operating room (OR) services at the Medical University of South Carolina (MUSC). He oversees procurement and contracting, three OR pharmacies, investigational drugs, the nuclear pharmacy, controlled substances, repackaging, and compounding services. Christopher is also an adjunct assistant professor with the South Carolina College of Pharmacy on the MUSC campus. He received his doctor of pharmacy from the University of Connecticut and completed both a PGY-1 practice residency and a PGY-2 health-system pharmacy administration residency at the MUSC medical center.
340B Support Resources
340B is a complex program, and keeping up-to-date with changes will ensure your facility receives the best drug prices available. Numerous organizations exist that can assist with 340B questions to maximize cost savings and help interpret program requirements.
New 340B Legislation Introduced
On July 27, 2011, the 340B Program Improvement Act (HR 2674—112th Congress)1 was introduced, which would amend the Public Health Service Act to make revisions to the 340B drug discount program to include drugs used in connection with an inpatient or outpatient service by enrolled facilities as covered drugs under the program. On August 1, 2011, the bill was referred to committee. If enacted, the bill will:
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