Confusion over 340B and GPOs

August 21, 2006

I would like to make a clarification to your article appearing in your June 19 issue entitled "Hospitals save with Premier's generic-substitution program." In the last paragraph of the article, it discusses how Premier hospital members, including those that qualify as disproportionate share hospitals (DSHs), are eligible to participate in Premier's new autosubstitution program. This statement should be clarified as it relates to DSHs participating in the 340B Drug Pricing Program. Such a substitution program can be used only within the inpatient, acute care setting in such DSHs. The Health Research & Services Administration's Office of Pharmacy Affairs, which administers the 340B Drug Pricing Program, requires eligible hospitals to certify that they do not participate in a group purchasing organization (GPO) or any other relationship for the purchase of outpatient covered drugs.

I would like to make a clarification to your article appearing in your June 19 issue entitled "Hospitals save with Premier's generic-substitution program." In the last paragraph of the article, it discusses how Premier hospital members, including those that qualify as disproportionate share hospitals (DSHs), are eligible to participate in Premier's new autosubstitution program. This statement should be clarified as it relates to DSHs participating in the 340B Drug Pricing Program. Such a substitution program can be used only within the inpatient, acute care setting in such DSHs. The Health Research & Services Administration's Office of Pharmacy Affairs, which administers the 340B Drug Pricing Program, requires eligible hospitals to certify that they do not participate in a group purchasing organization (GPO) or any other relationship for the purchase of outpatient covered drugs.

This precludes the hospital from utilizing a contract file of products, like a generic source program, managed by the hospital's pharmacy wholesaler or its inpatient GPO for the purchase of outpatient covered drugs. The only group purchasing arrangement permitted for DSHs is HRSA's 340B Prime Vendor. It is important to make this clarification to avoid potential confusion by DSHs, to ensure full compliance with the program, and ultimately to improve its overall integrity.

Christopher A. Hatwig, M.S., R.Ph., FASHP
Senior Director, 340B Prime Vendor Program/HPPI
Irving, Texas
chatwig@340bpvp.com

Web site: http://www.340bpvp.com/