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340B contract pharmacy networks were largely built during a period when the core logic was straightforward: more pharmacies meant more patient access, more captured prescriptions, and more program revenue.
That logic no longer holds in full. Manufacturer restrictions have narrowed designation options. Fee structures that once seemed incidental are now material cost drivers. And the operational demands of managing a large network have grown substantially.
In this environment, the covered entities best positioned to protect and grow their 340B programs are the ones with clear, data-driven visibility into how their networks are performing, not just at a high level, but pharmacy by pharmacy.
This article outlines the key areas to evaluate and what a more rigorous approach to network analysis looks like in practice.
One of the most consistent findings when covered entities actually analyze their dispensing data: the pharmacy they assumed was performing best often isn’t.
It’s easy to develop a sense of which pharmacies matter based on familiarity, community presence, or how long the relationship has been in place. But patient behavior doesn’t care about relationships. Scripts go where they go.
The gap between where you think scripts are going and where they’re actually going is the first thing to close. Because every decision that follows, which pharmacies to prioritize, which to designate under manufacturer restrictions, which to invest in operationally, flows from that baseline.
If that baseline is wrong, the decisions built on top of it are wrong too.
Even when you know where scripts are going, script count alone doesn’t tell you whether a pharmacy is actually contributing to your program.
The real picture requires looking at the full financial stack:
That last point is worth slowing down on. Switch fees are typically charged on every claim processed through a pharmacy for eligibility, regardless of whether it qualifies for 340B. A high-traffic pharmacy with low 340B capture can quietly accumulate significant cost.
A pharmacy can look active on paper while actually reducing your program’s net value. The only way to know is to really dive into the numbers.
This is also why some covered entities have started terminating contract pharmacies entirely, not because the relationship broke down, but because the math stopped working. When switch fees outpace 340B savings on lower-volume or lower-margin pharmacies, maintaining the contract is a net negative.
A network that looks solid in aggregate can look very different once you apply manufacturer restrictions.
When only one pharmacy can be designated for a given manufacturer’s drug, the question stops being “which pharmacies are active?” and becomes “which pharmacy is strongest for this specific drug, for this specific manufacturer?”
Those are not always the same pharmacy.
In practice, real optimization often requires running the numbers by manufacturer. A pharmacy that leads on Eli Lilly volume may not lead on Novo Nordisk. Designating based on overall volume instead of drug-specific performance means leaving 340B savings on the table.
A well-structured network today isn’t necessarily a large one, it’s one that’s been evaluated at a level of granularity that matches how the restrictions actually work.
Accuracy and Compliance Still apply
There’s an important distinction between a compliant contract pharmacy network and a high-performing one.
Keeping pharmacy service agreements current, ensuring contracted locations are accurately listed, maintaining up-to-date OPAIS records is non-negotiable. Gaps here create audit exposure. A common and preventable issue: a covered entity contracts with a chain, adds two new locations over time, but never updates the pharmacy service agreement to include them. Those locations are now operating outside the terms of the contract.
But compliance doesn’t tell you whether a pharmacy is worth keeping. You can have a fully compliant network that is still misaligned with patient behavior, quietly draining margin through fee structures, and more complex to manage than it needs to be.
Compliance keeps the program intact. Strategy is what makes it perform.
If you’re not sure where your network stands, the answer isn’t to add more pharmacies or wait for the next manufacturer announcement to force a decision. It’s to get visibility. Now more than ever your data
At a minimum, that means:
Even a focused version of this analysis tends to surface clear answers quickly: which pharmacies to prioritize, which to reconsider, and where the program has room to simplify.
The programs that are best positioned right now aren’t necessarily the ones with the most resources. They’re the ones that took the time to understand what their data was actually telling them.
RxTrail works with covered entities to do exactly this kind of analysis, turning dispensing data, financial performance, and manufacturer restrictions modeling into a clear picture of how your network is actually performing and where the opportunities are.
If you’re ready to move from assumptions to answers, we’re happy to start the conversation.
Schedule a call with the RxTrail team
