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If you ask hospital CFOs what's keeping the lights on, many will point to something far less glamorous than the groundbreaking therapies and high tech surgical robots that garner the most press attention: the 340B Drug Pricing Program. The program might not show up in splashy headlines or keynote speeches, yet this complex, nearly $40 billion ecosystem is quietly propping up hospitals across America.

As the scale of the program has grown from just over 8,000 covered entity sites in 2000 to over 50,000 in 2020, a dedicated ecosystem of technology solutions supporting 340B have emerged to allow these providers to streamline the operational, financial, and compliance aspects of 340B programs.

340B management solutions automate eligibility verification, split billing, and contract pharmacy oversight, ensuring accurate discounts and audit readiness. By proactively identifying compliance risks and optimizing drug cost savings, these platforms reduce administrative burden and enhance pharmacy financial performance.

What is 340B and why does it matter?

Established by Congress in 1992, 340B allows certain healthcare providers, known as covered entities within the program, to purchase some drugs at the manufacturer’s “best price.” The entity can then dispense that therapy for outpatient use-only, either directly via a provider-owned pharmacy or through a contracted pharmacy, to any patient of the covered entity and charge the contracted rate. The covered entity then gets to keep the difference between the acquisition price and the contracted rate: the “spread.”

In an era of heightened drug pricing pressures and declining reimbursement rates, hospitals and health systems used 340B savings strategically, offsetting budgetary shortfalls. In the case of rural hospitals, the program has been described as “a lifeline that allows rural safety net providers to stretch scarce federal resources and keep their doors open to provide vital services to their communities.” 

What use-cases do 340B management products serve?

For any 340B covered entity, successful management comes from maximizing capture rate (the total number of prescriptions filled under 340B, divided by the number of potentially eligible prescriptions) while minimizing diversion (dispensation of drugs to ineligible patients).

Thus, use-cases for 340B management products typically revolve around two related areas: operational optimization and compliance. Some key product capabilities include:

• Eligibility Tracking: For every medication dispensed under the 340B program, three dimensions of eligibility—patient eligibility, provider eligibility, and dispensation eligibility—must be verified, ideally in real-time. Effective 340B management solutions automate these eligibility checks and systematically log each verification, facilitating accuracy and compliance while minimizing errors.
  

• Audit Support: Covered entities regularly face audits conducted by HRSA and pharmaceutical manufacturers. Robust 340B platforms offer comprehensive audit-support tools, including automated documentation, transparent and traceable audit trails for each dispensation, and real-time validation mechanisms designed to detect discrepancies early and mitigate compliance risks.
  

• Split Billing Management: Many covered entities operate a single drug-dispensing system serving both 340B-eligible and non-eligible patients. Split billing functionality within these solutions accurately tracks drug usage at the dispensing point, allocating costs accordingly. Through advanced inventory management capabilities, these platforms virtually segment a single physical inventory into multiple usage buckets, streamlining procurement and reducing administrative overhead.
  

• Contract Pharmacy Oversight: Covered entities often partner with external “contract” pharmacies to dispense 340B medications. Managing the network of contracted pharmacies involves ensuring pharmacies comply with eligibility criteria, reconciling pharmacy inventories regularly, performing periodic compliance audits, and proactively identifying and addressing potential compliance vulnerabilities. 340B management platforms simplify and automate these processes, enabling efficient monitoring across complex pharmacy networks.

Vendor Landscape

The 340B management vendor space breaks down into a few distinct but overlapping buckets, spanning specialized tech solutions, broad pharmacy management, and legacy stalwarts.

First, several vendors lean into analytics and AI to tackle data integration and compliance headaches. Proximity, a newer tech-forward player, centralizes disparate datasets across wholesalers, TPAs, and EHRs, offering advanced analytics for deeper insights. Similarly, Plenful leverages AI and automation specifically to streamline audits, manage compliance risks, and ease administrative burdens by aggregating data across silos into actionable workflows.

Some platforms extend from broader pharmacy management or specialty pharmacy services. Clearway Health prioritizes specialty pharmacy programs within health systems and offers targeted 340B optimization offerings, while ProxsysRx incorporates 340B-specific solutions within a full-stack pharmacy services portfolio. Alchemy uniquely targets smaller safety-net providers—like STD clinics, Ryan White providers, and FQHCs—to build and operate in-house pharmacies rather than outsourcing.

Finally, there are generalist "full-stack" veterans like Macro Helix (McKesson), SunRx, and Verity Solutions (Cigna Group), combining established software with hands-on support for both covered entities and contract pharmacies. Pillr Health fits here as well. Formed from the merger of RxStrategies, Hudson Headwaters 340B, and RPH Innovations, Pillr offers a flexible tech-plus-services model.

Together, the landscape shows diverse approaches, each shaped by customer needs, operational complexity, and technology sophistication.