Good morning, healthcare professional.
CMS finalized major 340B program changes affecting covered entities and contract pharmacies. New rules establish stricter reporting requirements, modify dispute resolution, and clarify contract pharmacy eligibility. Changes take effect July 2026.
The 340B program generates $53 billion in annual discounted drug purchasing. Debate intensifies between hospitals, patient advocates, manufacturers, and pharmacies about savings distribution and covered entity obligations.
In today's healthcare digest:
- CMS finalizes 340B oversight rules with stricter reporting requirements
- Hospital outpatient drug spending grew 12% in 2025
- Insulin pricing stabilizes after manufacturer cap commitments
- CMS proposes new pharmacy quality measures for Medicare stars
CMS 340B Rule: Stricter Oversight and Contract Pharmacy Clarification
Bottom Line: Finalized 340B rules require annual savings utilization reporting, standardized contract pharmacy terms, and streamlined dispute resolution. Contract pharmacies must ensure systems support enhanced reporting mandates by July 2026.
Key provisions include:
- Annual reporting of 340B savings utilization by covered entities
- Standardized contract pharmacy agreement terms across arrangements
- Streamlined dispute resolution for manufacturer-entity disagreements on drug eligibility
- New data sharing requirements between contract pharmacies and covered entities
- Enhanced eligibility criteria clarification for contract pharmacy participation
Action items: Review requirements with covered entity partners. Verify systems can support reporting mandates. Update contract pharmacy agreements to reflect standardized terms.
Hospital Outpatient Drug Spending Surged 12% in 2025
Bottom Line: Hospital outpatient pharmacy spending grew 12% in 2025 versus 3% for community pharmacies, per Drug Channels Institute analysis. Hospitals capture more specialty dispensing through site-of-care steering and 340B utilization.
Growth drivers:
- Hospitals increasing specialty drug dispensing market share
- Site-of-care steering directing patients to hospital outpatient pharmacies
- Expanded 340B program utilization by eligible entities
- Vertical integration between health systems and pharmacy operations
Strategic response: Build specialty dispensing capabilities. Strengthen prescriber relationships. Advocate for site-neutral payment policies leveling competitive dynamics.
Insulin Pricing Stabilizes After Manufacturer Cap Commitments
Bottom Line: Major manufacturers' voluntary $35/month insulin caps now cover over 90% of commercially insured patients. Pricing stabilization compresses pharmacy margins on insulin products.
Market impact:
- Broad adoption of manufacturer cap commitments across commercial insurance
- Significant patient access achievement for diabetes management
- Compressed pharmacy margins on insulin dispensing
- Shift from margin-driven to patient loyalty focus
Pharmacy strategy: Capture all available manufacturer rebates and contracting incentives. Position insulin affordability programs as patient loyalty and community health initiatives.
CMS Proposes New Pharmacy Quality Measures for Medicare Stars
Bottom Line: CMS proposed three pharmacy measures for Medicare Star Ratings: MTM completion rate, generic dispensing efficiency, and statin adherence. Measures impact reimbursement through preferred network placement and performance bonuses.
Proposed measures:
- Medication therapy management completion rate tracking
- Generic dispensing efficiency across therapeutic categories
- Medication adherence for statin therapy monitoring
Financial implications: Direct impact on pharmacy reimbursement. Preferred network placement depends on performance. Performance bonuses tied to measure achievement.
Preparation steps: Begin tracking these metrics immediately. Invest in adherence programs and MTM completion infrastructure. Build value-based reimbursement capabilities before implementation.
The Shortlist
- Optum Rx announced performance-based reimbursement tiers for 2027 contracts
- GAO published findings that pharmacy benefit costs in Federal Employee Health Benefits Program grew 8% faster than medical costs
- Pharmacist burnout rates decreased to 48% in 2025 from 52% in 2024, per APhA Workforce Survey
- Health system consolidation resulted in 15 hospital pharmacy department mergers in Q4 2025
- European Medicines Agency approved oncology biologic biosimilar, signaling pending US competition