The Road to In-House Pharmacy Implementation with FQHC 340B Compliance

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The Road to In-House Pharmacy Implementation with FQHC 340B Compliance

Opening an entity-owned in-house pharmacy is one of the best ways that an FQHC can provide access to care for their patients. Not only does it provide access to affordable, quality medications, but it also expands the clinical access that your patients can have inside of your care, providing more integrated quality care for your patients. When an FQHC decides that they want to open a pharmacy, there are a lot of factors to consider, such as your health center’s location, inventory type, and provider engagement.

The Importance of Location, Inventory Type, and Provider Engagement

It is ideal for your pharmacy to be front and center in your FQHC, which means it's a good idea to put it near the front desk, right inside the doors. That way, when your patients walk in, it’s one of the first things they see. Often, if it's in the back of the building or in a basement, your patients won't even know you have it. You may also consider having a drive-thru or a curbside pickup option. If this is the case, these additions factor into your decision for your pharmacy’s location. It is important to note that this may require an extra build or moving other staff.

One of the first things an FQHC has to do when they're deciding which inventory type to choose is evaluate what percentage of their prescriptions will be 340B. This is typically a large percentage, if not all, of their prescriptions. In that case, it's probably best to use a physically separate inventory. This allows you to have a very low cost of inventory initially, and it doesn't require a lot of staff training to decide which inventory to pull the drug from. Another option is utilizing virtual inventory. In this case, it doesn't require staff training to choose which type to pull it from, but it does have a larger startup cost to consider.

One key to success for your FQHC is ensuring that your providers and the rest of the team are engaged in making the pharmacy successful. Your patients trust their provider, so they will follow what their provider suggests. If your medical providers treat the pharmacy as an extension of the medical care services, the patients will also view it that way, and they'll trust coming to you directly.

Open or Closed-Door: What’s the Difference?

Another critical decision point for an entity-owned pharmacy is whether or not they're going to be open-door or closed-door. Open-door occurs when you serve not only your health center patients but also patients from the community. On the other hand, closed-door occurs when your pharmacy only serves customers who are patients of your health center. Although this decision typically occurs in the beginning stages of opening your in-house pharmacy, it's also a decision that your health center can make at any point in the pharmacy lifecycle.

Although there are some occasions when a pharmacy goes from open-door to closed-door, it is most common for in-house pharmacies to go from being closed-door to open-door. As a closed-door pharmacy, you are required to contract individually with each pharmacy benefit manager for your participation in their plans, which can be very labor intensive. When you're an open-door pharmacy, you have the opportunity to enroll in a PSAO, which is also known as a Pharmacy Services Administration Organization. They assist you with your pharmacy benefit manager contracting process, which means that you do not need to establish one-on-one contracts with each PBM in the space. There will still be a few PBMs that you'll be required to contract with directly, but for the most part, you will contract with the PSAO, and they will help you manage all of your individual PBM contracts. The other benefit of a PSAO is that they often negotiate reimbursement rates that are higher than the contractual rates that you may have negotiated individually.

There’s More! Additional Benefits of Opening an In-House Pharmacy

When health centers are expanding their services to include pharmacy, there are typically additional benefits beyond what they anticipated. One of the biggest benefits is that they are able to ensure that their patients consistently receive their medications. When patients who are underinsured or uninsured come to your pharmacy, you can have programs in place to make sure that those medications are affordable for them. Your pharmacists are engaged with your care team, and they're able to work with the doctors to either find a medication that is a more affordable option or use the health center programs like a sliding fee scale or a prescription discount program to make sure your patients consistently have access.

Another benefit to an in-house pharmacy is that the pharmacists are able to not only dispense medications but also enhance the clinical services provided by the health center. Pharmacists will typically begin in the dispensing role, and then they become engaged with the clinical care team. From there, clinical services begin to develop, which are based on an interdisciplinary team model. You may see pharmacists assisting the care team in managing complex disease states. There are a lot of different opportunities to help improve the overall care of the patients within the health center and effectively leverage the skill sets of the nurses, physicians, pharmacists, and the other members of the care team to surround the patients and deliver a much better service.

Points to Consider When Hiring New Pharmacists

Adding a pharmacy to the scope of services can be intimidating for health centers. They're often very comfortable with the medical and dental side. They have healthcare professionals and leadership professionals who are experienced in those areas, but the addition of a pharmacy is something that's new. That leads to the question, “How do you find the right person or the right partner to help you with this?” One of the most important steps is hiring a pharmacist who is going to be with you through the pharmacy implementation process. While all pharmacists are trained in pharmacy school on the dispensing role, which includes filling prescriptions and providing direct patient care, pharmacy schools are lacking in the entrepreneurial aspects and knowledge of pharmacy administration that's required to run a health center pharmacy.

In the retail chain, much of what happens at the administrative level goes on in the corporate division, so hiring, H.R., inventory management, and oversight of compliance are all operating at the corporate level. Therefore, the pharmacist within the retail pharmacy is really focused on the dispensing role. It's important for FQHC leadership to be aware that when they're hiring pharmacists out of the retail space, they will not likely embody the administrative skill set that is required for success in running the FQHC’s independent pharmacy. It is also important to note that the skill set can be taught, so you want to focus on hiring for fit within your organization. Hire somebody who is going to be right for your care team, for your mission, and work well with your caregivers and your leadership.

How FQHC 340B Compliance Partners With Your Health Center

Within our pharmacy implementation service, our team’s focus is on helping build the skill set for your pharmacist. We assess their areas of strength, and we take into consideration the areas of need within your pharmacy. We focus on customizing the training that we deliver.

Our pharmacy implementation service focuses on helping health centers move from their initial idea of opening an in-house pharmacy to actually creating one. Our goal is to teach you all of the skill sets necessary to run your pharmacy successfully. Our team is here to support you as much as possible through the process and even after the pharmacy is open.

One of the first questions clients ask us about opening a pharmacy is, “How long is the process going to take?” We understand that this is an expensive process, and you're ready to open your pharmacy and start bringing in revenue to cover the cost, so we generally tell clients they can expect 6-9 months. Some states are quicker than others at getting the required licenses back, but we will work with you to optimize that process so your health center’s pharmacy can open its doors as soon as possible.

Collaborative Success

Successful entity-owned FQHC 340B pharmacies are a collaborative effort that involves provider buy-in, patient engagement, internal marketing, continuous optimization, and leveraging technology. By integrating the pharmacy into the holistic patient care approach, health centers can ensure patients receive the best care possible while fostering long-term success for their entity-owned pharmacies. Contact our team of experts for more information, tools, and assistance with opening an in-house pharmacy or optimizing your existing pharmacy.


FQHC 340B Compliance is the dedicated partner for Federally Qualified Health Centers seeking assistance with the 340B Program. Their mission is to provide the necessary resources to secure and optimize the 340B Program, enabling health centers to offer more comprehensive services to those in need. With a focus on improved compliance and oversight, they act as more than just consultants or automated systems, tailoring their services to meet your health center's unique needs. Visit their website, call (760) 780-7469, or email to learn more about FQHC 340B Compliance and how they can help your health center thrive.

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