What does the term "contract pharmacy" refer to in the context of 340B?

In the context of the 340B Drug Pricing Program, the term "contract pharmacy" specifically refers to a pharmacy that has a contractual agreement with a covered entity to dispense medications to patients. This arrangement allows the covered entity, which typically operates health centers or hospitals that serve low-income or uninsured patients, to extend its ability to provide discounted medications beyond just its own in-house pharmacy services.

This setup is essential because it ensures that patients who may not have easy access to the covered entity's facilities can still receive the benefits of the 340B program through local pharmacies. The contract pharmacy then helps the covered entity reach a wider patient base while complying with the 340B program regulations, which aim to reduce medication costs for vulnerable populations.

The other choices do not accurately capture the essence of what a contract pharmacy is in the 340B context. A pharmacy that is part of a health system might participate in the 340B program, but it does not specifically define a contract pharmacy. A pharmacy specializing in 340B medications does not necessarily imply that it has a contractual relationship with a covered entity. Lastly, a pharmacy with multiple locations describes a feature of the pharmacy but does not specifically relate to the contractual agreements that characterize a contract pharmacy in the