1540 Federal Register / Vol. 72, No. 8 / Friday, January 12, 2007 / Notices 

TABLE 2.—ESTIMATED ANNUAL RECORDKEEPING BURDEN1

21 CFR Section No. of 

Recordkeepers 

Annual Frequency 

per Recordkeeping 

Total Annual 

Records 

Hours per 

Record Total Hours 

106.100 5 10 50 4,000 200,000 

107.50(c)(3) 3 10 30 3,000 90,000 

Total 290,000 

1There are no capital costs or operating and maintenance costs associated with this collection of information. 

In compiling these estimates, FDA 

consulted its records of the number of 

infant formula submissions received in 

the past. The figures for hours per 

response are based on estimates from 

experienced persons in the agency and 

in industry. 

Dated: January 8, 2007. 

Jeffrey Shuren, 

Assistant Commissioner for Policy. 

[FR Doc. E7–331 Filed 1–11–07; 8:45 am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Health Resources and Services 

Administration 

Notice Regarding 340B Drug Pricing 

Program-Contract Pharmacy Services 

AGENCY: Health Resources and Services 

Administration, HHS. 

ACTION: Notice. 

SUMMARY: Section 340B of the Public 

Health Service Act implements a drug 

pricing program in which manufacturers 

who sell covered outpatient drugs to 

covered entities must agree to charge a 

price that will not exceed an amount 

determined under a statutory formula. 

The purpose of this notice is to inform 

interested parties of proposed 

guidelines regarding contract pharmacy 

services that will allow covered entities 

to utilize contract pharmacy services 

arrangements previously limited to the 

Alternative Methods Demonstration 

Project program. 

DATES: The public is invited to comment 

on the proposed guidelines by March 

13, 2007. After consideration of the 

submitted comments, the Health 

Resources and Services Administration 

(HRSA) will issue the final guidelines. 

ADDRESSES: Address all comments to 

Mr. Bradford R. Lang, Public Health 

Analyst, Office of Pharmacy Affairs 

(OPA), Health Resources and Services 

Administration (HRSA), 5600 Fishers 

Lane, Parklawn Building, Room 10C–03, 

Rockville, MD 20857. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Jimmy Mitchell, Director, OPA, HRSA, 

5600 Fishers Lane, Parklawn Building, 

Room 10C–03, Rockville, MD 20857, or 

by telephone through the Pharmacy 

Services Support Center at 1–800–628–

6297. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Section 602 of Public Law 102–585, 

the Veterans Health Care Act of 1992, 

enacted section 340B of the Public 

Health Service Act, Limitation on Prices 

of Drugs Purchased by Covered Entities. 

Previous guidelines pertaining to 

contract pharmacy services for the 340B 

drug pricing program (61 FR 43549, 

Aug. 23, 1996) stated that a covered 

entity could contract with only one 

pharmacy to provide all pharmacy 

services for any particular site of the 

covered entity. Furthermore, if the 

contract pharmacy had multiple 

locations, the covered entity site had to 

choose one, and only one, contract 

pharmacy location for provision of these 

services. 

In 2001, HRSA established 

Alternative Methods Demonstration 

Projects (AMDPs) which allowed 

covered entities that applied and were 

approved by HRSA to pursue 

alternatives to contracting with a single 

pharmacy. These alternative models 

included the following: (1) The use of 

multiple contract pharmacy service 

sites, (2) the utilization of a contract 

pharmacy to supplement in-house 

pharmacy services, and/or (3) the 

development of a network of 340B 

covered entities. The intent was to allow 

community health centers and other 

340B safety-net providers to develop 

new ways to improve access to 340B 

prescription drugs for their patients. 

From the time of the program’s 

inception until the end of April 2006, a 

total of 18 AMDPs were approved. Of 

those, 11 utilize a multiple contract 

pharmacies model, four establish a 

network of 340B covered entities, one is 

a combination of the network model and 

the multiple contract pharmacies model, 

one utilizes a contract pharmacy to 

supplement an in-house pharmacy, and 

one utilizes multiple contract 

pharmacies to supplement an in-house 

pharmacy. All but one of the projects is 

currently ongoing. A condition of 

AMDP approval is the requirement that 

the approved demonstration project be 

audited annually by an independent, 

outside auditor for drug diversion and 

duplicative discounts under Medicaid. 

The results of the audits are required to 

be reported to the Office of Pharmacy 

Affairs (OPA). To date, there has been 

no evidence of drug diversion or 

duplicate manufacturer’s discounts on 

340B drugs in the AMDP program. 

HRSA, acting through OPA, is 

proposing new guidelines that would 

allow covered entities to utilize 

multiple contract pharmacy service sites 

and the utilization of a contract 

pharmacy to supplement in-house 

pharmacy services that were previously 

limited to approved AMDPs. This 

proposed change is due to the success 

of the AMDPs, and the urging of safety 

net providers who wish to utilize 

alternatives to the single entity site/ 

single pharmacy location contractor 

model to provide broader access to 340B 

discounted drugs to eligible patient 

populations. Other than permitting 

these specified models, HRSA is not 

proposing other substantive changes to 

the contract pharmacy guidelines. The 

AMDP process will continue for those 

covered entities wishing to develop 

340B networks of covered entities. OPA 

will continue to review the utilization of 

network demonstration projects and 

consider adapting the rules to include 

them in the future. Of particular 

importance is the continued 

requirement that appropriate procedures 

be in place to prevent diversion of 340B 

drugs or a duplicative 340B drug 

discount and a Medicaid rebate on the 

same drug, which are prohibited under 

the statute. 

These proposed guidelines replace all 

sections of previous 340B Program 

guidance documents addressing nonnetwork contract pharmacy services, 

including, but not limited to, the 

‘‘Notice Regarding Section 602 of the 

Veterans Health Care Act of 1992; 

Contract Pharmacy Services,’’ 61 FR 


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Federal Register / Vol. 72, No. 8 / Friday, January 12, 2007 / Notices 1541 

43549 and any individual 

correspondence issued by HRSA on the 

subject. Demonstration projects 

previously approved under the multiple 

contract pharmacy model, the 

supplement to in-house pharmacy 

model, or a combination of the two 

models when this Federal guidance goes 

into effect, would be governed by this 

guidance and would no longer be 

subject to expiration of AMDPs, interim 

reporting or annual audits currently 

mandatory for all demonstration 

projects (this guidance only applies to 

audits required under the AMDP and 

leaves unchanged audit requirements 

under any other authority or program). 

While annual audits will no longer be 

required to be provided to OPA 

annually, covered entities are required 

to maintain fully auditable records and 

OPA expects covered entities to include 

appropriate sampling of multiple 

contract pharmacy arrangements in the 

course of routine annual audits. 

Demonstration projects previously 

approved to utilize the network model 

would continue to be subject to all 

program requirements and conditions 

set up under the AMDP. Any covered 

entity wishing to utilize a network 

model would still be required to seek 

approval under the AMDP and may not 

do so without formal approval. 

B. Contract Pharmacy Services 

Mechanism 

(1) Basic Requirements for Utilization of 

Contract Pharmacy Arrangements 

Covered entities that wish to utilize 

contract pharmacy services to dispense 

section 340B outpatient drugs must 

have a written contract in place between 

themselves and a pharmacy. This 

mechanism is designed to facilitate 

program participation for those covered 

entities that do not have access to 

available or appropriate ‘‘in-house’’

pharmacy services, those covered 

entities who have access to ‘‘in-house’’

pharmacy services but who wish to 

supplement these ‘‘in-house’’ services, 

and covered entities that wish to utilize 

multiple contract pharmacies to 

increase patient access to 340B drugs. 

The covered entity has the 

responsibility to: ensure against illegal 

diversion and duplicate discounts, 

maintain readily auditable records, and 

meet all other 340B Drug Pricing 

Program requirements. OPA has 

provided a model agreement format 

below as guidance for the type of 

contractual provisions expected in such 

agreements as well as suggested contract 

provisions in the Appendix. All covered 

entities utilizing a contract pharmacy 

must comply with the certification 

requirements described in (4) below. 

(2) Potential Alternatives to Single 

Location, Single Pharmacy Model 

In addition to contracting with a 

single pharmacy for each clinical site, 

covered entities may pursue more 

complex arrangements that include 

multiple pharmacies only if: (a) There is 

a written agreement and procedures 

meeting the basic requirements outlined 

in (1) above between the covered entity 

and each pharmacy; (b) the operation 

continues to meet all 340B Drug Pricing 

Program requirements and does not 

create unlawful diversion or duplicate 

discounts; and (c) the arrangements are 

one of the two following models 

individually or in combination: (i) The 

use of multiple contract pharmacy 

service sites, and/or (ii) the utilization 

of a contract pharmacy (ies) to 

supplement in-house pharmacy 

services. The use of multiple contract 

pharmacy service sites refers to any 

arrangement wherein a covered entity 

site seeks to provide drugs at 340B 

discounted prices for its patients at 

more than one pharmacy location. 

Supplementing in-house pharmacy 

services with a contract pharmacy refers 

to any arrangement wherein a covered 

entity site seeks to purchase drugs at 

340B discounted prices for its patients 

at both an in-house pharmacy and at 

least one additional contract pharmacy 

location. 

(3) Model Agreement Provisions 

The following are suggested 

provisions for a model agreement: 

(a) The covered entity will purchase 

the drug, maintain title to the drug and 

assume responsibility for establishing 

its price, pursuant to the terms of a HHS 

grant (if applicable) and any applicable 

state and local laws and consumer 

protection laws. 

A ‘‘ship to, bill to’’ procedure is used 

in which the covered entity purchases 

the drug; the manufacturer/wholesaler 

must bill the covered entity for the drug 

that it purchased, but ships the drug 

directly to the contract pharmacy 

(Section 1 of Appendix.) In cases where 

a covered entity has more than one site, 

it may choose between having each site 

billed individually or designating a 

single covered entity billing address for 

all 340B drug purchases. 

(b) The contract pharmacy will 

provide comprehensive pharmacy 

services (e.g., dispensing, 

recordkeeping, drug utilization review, 

formulary maintenance, patient profile, 

patient counseling, and medication 

therapy management services). Each 

covered entity which purchases its 

covered outpatient drugs has the option 

of individually contracting for 

pharmacy services with a pharmacy(ies) 

of its choice. 

(c) The covered entity health care 

provider will inform the patient of his 

or her freedom to choose a pharmacy 

provider. If the patient does not elect to 

use the contracted service, the patient 

may obtain the prescription from the 

covered entity and then obtain the 

drug(s) from the pharmacy provider of 

his or her choice. 

When a patient obtains a drug from a 

retail pharmacy other than a covered 

entity’s contract pharmacy, the 

manufacturer is not required to offer 

this drug at the 340B price. 

(d) The contract pharmacy may 

provide other services to the covered 

entity at the option of the covered entity 

(e.g., home care, delivery, 

reimbursement services). Regardless of 

the services provided by the contract 

pharmacy, access to 340B pricing will 

always be restricted to only patients of 

the covered entity. 

(e) The contract pharmacy and the 

covered entity will adhere to all Federal, 

State, and local laws and requirements. 

Additionally, all HHS grantees, 

disproportionate share hospitals and 

FQHC Look-Alikes will adhere to all 

rules and regulations that apply to them 

as grantees or otherwise eligible entities. 

Both the covered entity and the 

contract pharmacy are aware of the 

potential for civil or criminal penalties 

if the covered entity and/or the contract 

pharmacy violate Federal or State law. 

[The Department reserves the right to 

take such action as may be appropriate 

if it determines that such a violation has 

occurred.] 

(f) The contract pharmacy will 

provide the covered entity with reports 

consistent with customary business 

practices (e.g., quarterly billing 

statements, status reports of collections 

and receiving and dispensing records). 

See Section 2 of Appendix. 

(g) The contract pharmacy, with the 

assistance of the covered entity, will 

establish and maintain a tracking system 

suitable to prevent diversion of section 

340B drugs to individuals who are not 

patients of the covered entity. 

Customary business records may be 

used for this purpose. The covered 

entity will establish a process for a 

periodic comparison of its prescribing 

records with the contract pharmacy’s 

dispensing records to detect potential 

irregularities. See Section 3 of 

Appendix. 

(h) The covered entity and the 

contract pharmacy will develop a 

system to verify patient eligibility, as 

defined by HRSA guidelines. 


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Both parties agree that they will not 

resell or transfer a drug purchased at 

section 340B prices to an individual 

who is not a patient of the covered 

entity. See 42 U.S.C. 256a(a)(5)(B). The 

covered entity understands that it can 

be removed from the list of covered 

entities because of its participation in 

drug diversion and no longer be eligible 

for 340B pricing. See Section 4 of 

Appendix. 

(i) Neither party will use drugs 

purchased under section 340B to 

dispense Medicaid prescriptions, unless 

the covered entity, the contract 

pharmacy and the State Medicaid 

agency have established an arrangement 

to prevent duplicate discounts. Any 

such arrangement shall be reported to 

the Office of Pharmacy Affairs by the 

covered entity. 

(j) Both parties understand that they 

are subject to audits (by the Department 

and participating manufacturers) of 

records that directly pertain to the 

entity’s compliance with the drug resale 

or transfer prohibition and the 

prohibition against duplicate discounts. 

See 42 U.S.C § 256a(a)(5). 

The contract pharmacy will assure 

that all pertinent reimbursement 

accounts and dispensing records, 

maintained by the pharmacy, will be 

accessible separately from the 

pharmacy’s own operations and will be 

made available to the covered entity, the 

Department, and the manufacturer in 

the case of an audit. 

(k) Upon written request to the 

covered entity, a copy of this contract 

pharmacy service agreement will be 

provided to a participating 

manufacturer which sells covered 

outpatient drugs to the covered entity. 

All confidential or proprietary 

information may be deleted from the 

document. 

(4) Certification 

Under section 340B, if a covered 

entity using contract pharmacy services 

requests to purchase a covered 

outpatient drug from a participating 

manufacturer, the statute directs the 

manufacturer to sell the drug at a price 

not to exceed the statutory 340B 

discount price. If the entity directs the 

drug shipment to its contract 

pharmacy(ies), we see no basis on 

which to conclude that section 340B 

precludes this type of transaction or 

otherwise exempts the manufacturer 

from statutory compliance. However, 

the entity must comply, under any 

distribution mechanism, with the 

statutory prohibition on drug diversion 

and duplicate discounting. 

To provide OPA and manufacturers 

with assurance that the covered entity 

has acted in a manner which limits the 

potential for drug diversion, the covered 

entity is required to submit to OPA a 

certification that it has signed and has 

in effect an agreement with the contract 

pharmacy(ies) containing the 

aforementioned provisions (see 3 

above). However, if a covered entity 

wishes to utilize an agreement with 

provisions different from those listed 

above that it believes meets 340B 

requirements; OPA will review the 

proposed agreement provisions for 

sufficiency. The names of those covered 

entities which submit a certification, or 

an alternate mechanism approved by 

OPA, will be listed on the OPA Web site 

for the convenience of participating 

drug manufacturers and wholesaler 

distributors. 

In addition, any covered entity that 

has opted to utilize any pharmacy 

arrangement described in (2) must 

specify which arrangement or 

combination of arrangements it is 

utilizing, the names and 340B 

identification numbers of all covered 

entities participating, and the names of 

any pharmacies participating. 

(5) Anti-Kickback Statute 

Contract pharmacies and covered 

entities should be aware of the potential 

for civil or criminal penalties if the 

contract pharmacy violates Federal or 

State law. In negotiating and executing 

a contract pharmacy service agreement 

pursuant to these guidelines, contract 

pharmacies and covered entities should 

be aware of and take into consideration 

the provisions of the Medicare and 

Medicaid anti-kickback statute, 42 

U.S.C. 1320a–7b(b). This statute makes 

it a felony for a person or entity to 

knowingly and willfully offer, pay, 

solicit, or receive remuneration with the 

intent to induce, or in return for the 

referral of, Medicare or a State health 

care program business. State health care 

programs are Medicaid, the Maternal 

and Child Health Block Grant program, 

and the Social Services Block Grant 

program. Apart from the criminal 

penalties, a person or entity is also 

subject to exclusion from participation 

in the Medicare and State health care 

programs for a knowing and willful 

violation of the statute pursuant to 42 

U.S.C. 1320a–7(b)(7). 

The anti-kickback statute is very 

broad. Prohibited conduct covers not 

only remuneration intended to induce 

referrals of patients, but also includes 

remuneration intended to induce the 

purchasing, leasing, ordering, or 

arranging for any good, facility, service, 

or item paid for by Medicare or a State 

health care program. The statute 

specifically identifies kickbacks, bribes, 

and rebates as illegal remuneration, but 

also covers the transferring of anything 

of value in any form or manner 

whatsoever. This illegal remuneration 

may be furnished directly or indirectly, 

overtly or covertly, in cash or in kind 

and covers situations where there is no 

direct payment at all, but merely a 

discount or other reduction in price or 

the offering of a free good(s). 

Arrangements between contract 

pharmacies and covered entities that 

could violate the anti-kickback statute 

would include any situation where the 

covered entity agrees to refer patients to 

the contract pharmacy in return for the 

contract pharmacy or an entity owned 

or controlled by the contract pharmacy 

agreeing to undertake or furnish certain 

activities or services to the covered 

entity at no charge or at a reduced or 

below cost charge. These activities or 

services would include the provision of 

contract pharmacy services, home care 

services, money or grants for staff or 

service support, or medical equipment 

or supplies, or the remodeling of the 

covered entity’s premises. For example, 

if a contract pharmacy agreed to furnish 

covered outpatient drugs in return for 

the covered entity referring its Medicaid 

patients to the contract pharmacy to 

have their prescriptions filled, the 

arrangement would violate the antikickback statute. Similarly, if the 

contract pharmacy agreed to provide 

billing services for the covered entity at 

no charge in return for the covered 

entity referring its patients to the 

contract pharmacy for home or durable 

medical equipment, the statute would 

be violated. 

Pursuant to the authority in 42 U.S.C. 

1320a–7b(b)(3), the Secretary of HHS 

has published regulations setting forth 

certain exceptions to the anti-kickback 

statute, commonly referred to as ‘‘safe 

harbors.’’ These regulations are codified 

at 42 CFR 1001.952. Each of the safe 

harbors sets forth various requirements 

which must be met in order for a person 

or entity to be immune from prosecution 

or exclusion under the safe harbors. 

C. Appendix—Suggested Contract 

Provisions 

(1) ‘‘The covered entity owns covered 

drugs and arranges to be billed directly 

for such drugs. The pharmacy will 

compare all shipments received to the 

orders and inform the covered entity of 

any discrepancy within five (5) business 

days of receipt. The covered entity will 

make timely payments for such drugs 

delivered to the (pharmacy).’’

(2) ‘‘The covered entity will verify, 

using the contract pharmacy’s (readily 

retrievable) customary business records, 

that a tracking system exists which will 


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Federal Register / Vol. 72, No. 8 / Friday, January 12, 2007 / Notices 1543 

ensure that drugs purchased under the 

340B Drug Pricing Program are not 

diverted to individuals who are not 

patients of the covered entity. Such 

records can include: prescription files, 

velocity reports, and records of ordering 

and receipt. These records will be 

maintained for the period of time 

required by State law and regulations.’’

(3) ‘‘Prior to the contract pharmacy 

providing pharmacy services pursuant 

to this agreement, the covered entity 

will have the opportunity, upon 

reasonable notice and during business 

hours, to examine the tracking system. 

For example, such a tracking system 

may include quarterly sample 

comparisons of eligible patient 

prescriptions to the dispensing records 

and a six (6) month comparison of 340B 

drug purchasing and dispensing records 

as is routinely done in other 

reconciliation procedures. The contract 

pharmacy will permit the covered entity 

or its duly authorized representatives to 

have reasonable access to contract 

pharmacy’s facilities and records during 

the term of this agreement in order to 

make periodic checks regarding the 

efficacy of such tracking systems. The 

contract pharmacy agrees to make any 

and all adjustments to the tracking 

system which the covered entity advises 

are reasonably necessary to prevent 

diversion of covered drugs to 

individuals who are not patients of the 

covered entity.’’

(4) ‘‘The pharmacy will dispense 

covered drugs only in the following 

circumstances: (a) Upon presentation of 

a prescription bearing the covered 

entity’s name, the eligible patient’s 

name, a designation that the patient is 

an eligible patient of the covered entity, 

and the signature of a legally qualified 

health care provider affiliated with the 

covered entity; or (b) receipt of a 

prescription ordered by telephone or 

other means of electronic transmission 

that is permitted by State or local law 

on behalf of an eligible patient by a 

legally qualified health care provider 

affiliated with the covered entity who 

states that the prescription is for an 

eligible patient. The covered entity will 

furnish a list to the pharmacy of all such 

qualified health care providers and will 

update the list of providers to reflect 

any changes. If a contract pharmacy is 

found to have violated the drug 

diversion prohibition, the contract 

pharmacy will pay the covered entity 

the amount of the discount in question 

so that the covered entity can reimburse 

the manufacturer.’’

Dated: December 22, 2006. 

Elizabeth M. Duke, 

Administrator. 

[FR Doc. E7–334 Filed 1–11–07; 8:45 am] 

BILLING CODE 4165–15–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Health Resources and Services 

Administration 

Notice Regarding Section 602 of the 

Veterans Health Care Act of 1992 

Definition of ‘‘Patient’’

AGENCY: Health Resources and Services 

Administration, HHS. 

ACTION: Notice. 

SUMMARY: Section 602 of Public Law 

102–585, the ‘‘Veterans Health Care Act 

of 1992,’’ enacted Section 340B of the 

Public Health Service (PHS) Act 

‘‘Limitation on Prices of Drugs 

Purchased by Covered Entities.’’ Section 

340B provides that in order to obtain 

Medicaid reimbursement for its covered 

outpatient drugs, a manufacturer must 

sign a pharmaceutical pricing agreement 

with the Secretary of Health and Human 

Services in which the manufacturer 

agrees to charge a price to covered 

entities for outpatient drugs that will 

not exceed an amount determined under 

a statutory formula. Section 340B is 

administered as the ‘‘340B Drug Pricing 

Program’’ and is commonly referred to 

as ‘‘the 340B Program.’’

Section 340B states that it is illegal for 

covered entities to sell medications 

purchased under the 340B Program to 

persons who are not considered 

‘‘patients’’ of the covered entity. The 

purpose of this notice is to inform 

interested parties of proposed 

clarifications to the definition of 

‘‘patient’’ for whom the covered entity 

can purchase discounted 

pharmaceuticals under the 340B 

Program. This clarification is necessary 

to protect the integrity of the 340B 

Program and to assist covered entities 

and other participants in their 

compliance efforts. 

DATES: The public is invited to submit 

comments on the proposed guidelines 

by March 13, 2007. After consideration 

of the comments submitted, the 

Secretary will issue final guidelines. 

ADDRESSES: Address all comments to 

Mr. Bradford R. Lang, Public Health 

Analyst, Office of Pharmacy Affairs 

(OPA), Healthcare Systems Bureau 

(HSB), Health Resources and Services 

Administration (HRSA), 5600 Fishers 

Lane, Parklawn Building, Room 10C–03, 

Rockville, MD 20857. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Jimmy Mitchell, Director, OPA, HSB, 

HRSA, 5600 Fishers Lane, Parklawn 

Building, Room 10C–03, Rockville, MD 

20857, or by telephone through the 

Pharmacy Services Support Center at 1–

800–628–6297. 

SUPPLEMENTARY INFORMATION: 

Introduction 

Section 340B(a)(4) of the PHS Act and 

section 1927(a) of the Social Security 

Act list the various types of 

organizations eligible to participate in 

and purchase discounted drugs under 

the 340B Program. Eligibility for 

participation in the 340B Program is 

strictly limited to the specific categories 

of entities specified in these statutes. 

Section 340B(a)(5)(B) of the PHS Act 

prohibits entities from selling (or 

otherwise transferring) drugs purchased 

under the 340B Program to anyone who 

is not a patient of the covered entity. 

Responsibility for ensuring compliance 

with this provision rests with the 

covered entity. Congress did not define 

the term ‘‘patient’’ in Section 340B, and 

initial HRSA guidelines implementing 

the 340B Program directed covered 

entities to ‘‘develop and institute 

adequate safeguards to prevent the 

transfer of discounted outpatient drugs 

to individuals who are not eligible for 

the discount’’ in order to prevent 

diversion. To accomplish this, entities 

were encouraged to utilize a separate 

purchasing account and separate 

dispensing records (See 59 FR 25110). 

As covered entities, manufacturers, 

and others began to implement the 340B 

Program, it became apparent that 

additional clarification of the patient 

definition was needed and on October 

24, 1996, HRSA issued additional 

guidelines regarding the definition of a 

covered entity ‘‘patient’’ (61 FR 55156). 

These guidelines stated that the 

following definition of patient would 

apply for the purposes of the 340B 

Program: 

An individual is a ‘‘patient’’ of a covered 

entity (with the exception of State-operated 

or funded AIDS drug purchasing assistance 

programs) only if: 

1. The covered entity has established a 

relationship with the individual, such that 

the covered entity maintains records of the 

individual’s health care; and 

2. The individual receives health care 

services from a health care professional who 

is either employed by the covered entity or 

provides health care under contractual or 

other arrangements (e.g., referral for 

consultation) such that responsibility for the 

care provided remains with the covered 

entity; and 

3. The individual receives a health care 

service or range of services from the covered 

entity which is consistent with the service or 


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