The 340B Drug Pricing Program has become a lifeline for hospitals, healthcare entities, and patients. It allows covered entities to provide discounted medications to underserved populations, reinvesting savings into services. Yet, scaling a 340B program while protecting profit margins is a delicate balancing act. It requires compliance, operational precision, the right technology, and strategic foresight.

Current Challenges with Growing 340B Programs

The 340B landscape is rife with complexity and change. From policy shifts at the federal and state levels to litigation involving pharmaceutical manufacturers, stakeholders face numerous challenges. 

Common issues with 340B programs include:

• Manufacturer Restrictions: A large number of pharmaceutical manufacturers have imposed restrictions on discounts, particularly for contract pharmacy settings. This limits access and impacts the bottom line for many providers. 
• State and Federal Divergence: While states like Arkansas and South Dakota have enacted legislation to protect 340B pricing, federal action has been slower. This dichotomy creates an uneven playing field and uncertainty for covered entities. 
• Unpredictable Litigation Outcomes: Active court cases, including challenges to state laws by major drug companies, have introduced significant unpredictability. For instance, Arkansas and Louisiana have seen legal victories, but other states like Kansas faced setbacks. 
• Provider Reporting Mandates: New state laws demanding detailed reporting from providers are becoming more frequent. Some of these are resource-intensive, risking operational inefficiencies. 

Technology Challenges in 340B Compliance

There are two common technology solutions for managing 340B programs: split billing systems and audit automation tools. 

Split billing solutions can help healthcare organizations manage 340B virtual inventory, identify which drug purchases are eligible for 340B pricing, and generate audit trails and reports. However, split billing software is only as good as the date it’s fed and the rules it follows. 

340B audit tools help ensure it’s doing what it’s supposed to and that your organization is compliant, efficient, and financially sound. Having 340B split billing auditing conducted by a third party adds a layer of credibility, objectivity, and risk protection. 

While split billing solutions are adept at handling complex pricing and supply chain data, there are common challenges with how eligible claims are determined, which opens organizations up to risk. Internal 340B teams are typically auditing targeted and/or random samples to maintain compliance to the HRSA regulations.

In contrast, solutions like 340BCheck offer 100% audit capability, verifying every claim. This comprehensive approach eliminates the risks inherent in sampling, enhances HRSA audit readiness, and significantly reduces manual workloads. 

By integrating 100% audit solutions, hospitals and grantees gain an essential layer of oversight, ensuring their 340B programs operate with precision, efficiency, and confidence. An internal check is great, but a third-party audit gives you external credibility, deeper expertise, and peace of mind that your 340B program — and especially your split billing — is solid and defensible.

Five Strategies for Scaling 340B Without Impacting Profit Margins 

When scaling a 340B program, it’s about safeguarding profitability while maintaining operational efficiency t. Our webinar, “Fireside Chat: Strategies for Measuring Success & Ensuring Compliance in Your 340B Program,” explored approaches to achieving this balance. Below is a brief summary of the insights shared by Ted Slafsky – CEO of 340B Report and Lauren Forni, PharmD, MBA – Senior Director of Clinical Strategy at Bluesight. 

1. Embrace Rigorous Compliance 

Compliance is the foundation of any successful 340B program. State and federal regulations are intricate, and failing to meet requirements can lead to penalties, financial loss, or exclusion from the program. 

• Conduct regular claim audits to identify and address inaccuracies. 
• Centralize all compliance documentation to simplify responses to audits or litigation requirements. 
• Stay updated on changing state laws, particularly those regulating contract pharmacies or pharmacy benefit management discrimination.

2. Leverage Technology to Boost Efficiency and Agility 

Investing in 340B compliance technology will support the scaling of your program productively. Automated platforms are a game-changer for reducing manual work while maintaining precision. Technology provides insights into compliance trends and risks, which can inform more strategic decisions. This foresight empowers teams to proactively adapt to anticipated changes, rather than reactively scrambling after the fact.

• Deploy tools that analyze and consolidate data from multiple sources.
• Utilize software, like 340BCheck, with 100% auditing capabilities to efficiently assess claims eligibility and prevent margin drains caused by ineligible prescriptions.
• Utilize reporting capabilities that are strong enough to meet increasing state-level provider reporting mandates. 
• Technology minimizes the manual effort required to implement and maintain compliance. Instead of dedicating significant time and personnel to interpret and apply each new regulation, teams can adapt existing frameworks with minimal lift. This efficiency allows organizations to respond to regulatory changes without overextending resources or disrupting day-to-day operations.

3. Explore Opportunities for Cost Recovery 

Reduce costs and bolster profit margins by identifying areas for cost recovery within your 340B operations. 

• Negotiate with vendors or distributors, when possible, for aligned pricing agreements. 
• Revisit reimbursement structures for best alignment to contract pharmacy pricing laws. 
• Consider working with pharmacists and consultants to optimize inventory management and eliminate waste. 

4. Focus on Advocacy and Partnerships 

Building relationships can positively impact your organization’s ability to scale sustainably. 

• Familiarize yourself with 340B legislators at the Federal and State levels and engage wherever possible
• Advocacy not only allows proactive adjustments to uncertain policies, but also fosters support for favorable 340B legislation. 
• Collaborate with coalitions and associations, like 340B Health, for advocacy and shared resources. 

5. Prioritize Community Engagement 

Scaling your 340B program to serve more patients—even under uncertain conditions—is possible when you integrate meaningful community engagement. 

• Reinforce the use of 340B revenue to benefit underserved populations. Transparency builds goodwill in both the community and with policy stakeholders. 
• Share success stories about patients who benefit from the program. Personal narratives can humanize legislative conversations. 

Reinforce Your 340B Foundations to Scale Sustainably 

Navigating uncertainty lies in preparation and adaptability. When your workflows, compliance systems, and advocacy networks are robust, scaling your 340B program becomes more manageable—even amidst a challenging policy landscape. Watch the on-demand demo to learn more about how 340BCheck can scale and streamline your 340B compliance by uniting disparate data sources, monitoring compliance, and validating every transaction to remain HRSA audit-ready.