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North Carolina Hospital Association

Serving North Carolina Hospitals & Health Systems

340B Overview

The 340B Federal Drug Discount Program expands access to affordable medications to low-income populations by supporting the operations of healthcare safety net providers. The program was created in 1992 with the enactment of Public Law 102-585 of the Veterans Health Care Act.

The passage of the Affordable Care Act in 2010 opened new opportunities within the Federal 340B Drug Program for hospitals, patients and pharmacies. The categories of eligible hospitals and options for pharmacy contracting were expanded. Definitions of covered entities include children's hospitals, free-standing cancer centers, critical access hospitals (CAH), sole community hospitals and rural referral centers (RRC).

The 340B program is primarily a discounted drug purchasing option for safety net providers, including disproportionate share, rural referral centers, sole community and critical access hospitals. Public hospitals and non-profit hospitals in these categories are eligible to participate in 340B. Eligible hospitals may save an average of 25% on drug purchases for outpatient pharmacy distribution (excluding orphan drugs for CAHs, sole community or rural referral). Contract pharmacy agreements are also available to the 340B hospitals (for hospital patients only) to extend 340B pricing into the community.

To participate, an eligible hospital is required to submit an application to the Office of Pharmacy Affairs with HRSA, the federal agency responsible for the 340B program. The application materials and guidelines are posted on the Pharmacy Affairs website. Please be certain to use the forms and the application guidelines for the correct hospital type.

** Please see the 340B Member Resources section of our website for more information on this topic.



Who is an Eligible 340B Patient?

The posted Federal Register Notice addresses the definition of an eligible 340B patient. The key determination always requires the person receiving 340B drugs must be a patient of the 340B entity.

An individual is a "340B eligible patient" of a covered entity only if:

  1. The covered entity has established a relationship with the individual, such that the covered entity maintains records of the individual's health care; and
  2. The individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g., referral for consultation) such that responsibility for the care provided remains with the covered entity; and
  3. The individual receives a health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally-qualified health center look-alike status has been provided to the entity. Disproportionate share hospitals are exempt from this requirement.

For more information on issues related to 340B, please contact:

Jeff Spade
NCHA, Executive Director, NC Center for Rural Health Innovation and Performance
(919) 677-4223

Chris Skowronek
NCHA, Director of Health Policy
(919) 677-4213


NCHA Corporate Partner: SUNRx

NCHA entered into a corporate partnership arrangement with SUNRx, to provide North Carolina hospitals with a vendor that has automated solutions to create, manage and expand 340B contract pharmacy relationships as well as education on 340B regulations, compliance, reporting and program management. With almost 70 hospitals in NC qualifying for 340B, this partnership represents significant benefit and cost saving opportunities for North Carolina patients.

Because of the complex regulatory, compliance and contracting environment associated with the 340B program, many hospitals and pharmacies elect to engage a third party 340B program management vendor, like SUNRx, when starting or expanding their own 340B contract pharmacy network. For example, eligible hospitals wishing to expand their 340B program now have the opportunity to contract with multiple community pharmacies to ensure a robust pharmacy network for their patients to access. Each pharmacy must agree to provide the hospital with reports such as quarterly billing statements, status of collections, receiving and drug dispensing and records pertaining to drug diversion, duplicate discount prohibitions and patient eligibility. The hospital then must manage the contracting and reporting relationship with each contract pharmacy. Both the hospital and contracting pharmacy can be audited by manufacturers or the government, thus accurate records directly pertaining to compliance with drug diversion and duplicate discount prohibitions, for example, must be kept to ensure compliance. SUNRx, NCHA and Strategic Partners can help streamline this complicated process to create a program tailored to the hospital's needs.

The SUNRx 340B Complete software automates patient eligibility matching and compliance reporting requirements, creating and maintaining auditable records for all parties involved. SUNRx also manages pharmacy contracts, product restocking and tracking and claims adjudication on behalf of the hospital. 

For More Information Contact:

Matthew Bobo
Director, Sales SUNRx

Chris Skowronek
NCHA, Vice President

340B Resources and Key Contacts

The Office of Pharmacy Affairs (OPA)
The Office of Pharmacy Affairs is the HRSA department responsible for the 340B program. The site specifies the eligibility criteria, the application process and forms, the required certifications, FAQs, databases and the various rules and regulations.

340B Health [Formerly Known As Safety Net Hospitals for Pharmaceutical Access (SNHPA)]
340B Health is a membership organization of more than 1,300 public and private nonprofit hospitals and health systems in the federal 340B drug pricing program. The organization formed in 1993 to increase the affordability and accessibility of pharmaceutical and clinical care for the nation's poor and underserved populations. 340B Health monitors, educates, and serves as an advocate on federal legislative and regulatory issues related to drug pricing and other pharmacy matters affecting safety-net providers. Our membership consists of a broad spectrum of hospitals, including academic medical centers, community hospitals, children's hospitals, and rural facilities.

340B Prime Vendor Program
To simplify the process for obtaining 340B drugs, the original 340B legislation contained a special requirement that mandated the establishment of a "prime vendor." Benefits of the 340B Prime Vendor Program include familiarity with subtleties of the Section 340B program, value-added service and sub-340B prices.

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