services. Additionally, it merits noting that only one of the eight covered
entities that failed to pass discounts on to the uninsured was a community
Inconsistent oversight of 340B contract pharmacy arrangements prompted
the OIG to recommend an increase in the use of independent auditors by
covered entities.186 According to the 2014 OIG Report, only seven of the
thirty covered entities interviewed had retained independent auditors.187 The
majority of the remaining covered entities monitored contract pharmacies on
an ad hoc basis.188 In response, the proposed MegaGuidance imposes a
requirement for covered entities to conduct annual audits using outside
independent auditors.189 The tension underlying this proposed requirement
is the dearth of experienced and qualified auditors in the 340B field.
In its 2014 memo, the OIG conceded that it did not use a representative
sample, resulting in its findings not being generalizable.190 That has not
stopped the Senators who requested the report from issuing statements
generally critical of HRSA. In the conclusion to its 2014 memo, the OIG
stated the memorandum report was issued directly in final form because it
contained no recommendations and that they are “continuing to review
contract pharmacy arrangements in the 340B Program and may include
recommendations in an upcoming report if appropriate.”191The OPA issued a
brief response to OIG’s report on the same day, February 5, 2014,
emphasizing HRSA’s commitment to strengthening 340B Program integrity
with a focus on contract pharmacy arrangements.192
V. STRUCTURING CONTRACT PHARMACY AGREEMENTS
340B contract pharmacy agreements have particular requirements beyond
good business contracting principles. In fact, HRSA published contracting
“best practices” for these types of agreements, while resisting the request to
publish a model contract. Not surprisingly, HRSA’s guidelines for 340B
contract pharmacy agreements focus on safeguards against diversion and
duplication.193 Of course, a contract can only do so much. The parties must
act in accordance with the contract and law and hold each other
185. See id. at 14.
186. See id.
187. See id. at 15.
188. See id. at 14.
189. See 80 Fed. Reg. 52300, 52321.
192. SeeKRISTAPEDLEYDIRECTOR,OFFICE OFPHARMACYAFFAIRS,CONTRACT
PHARMACY OVERSIGHT (February 5, 2014), http://www.hrsa.gov/opa/updates/