What must a covered entity establish for contract pharmacy operations?

A covered entity participating in the 340B Program must establish oversight policies and procedures for contract pharmacy operations to ensure compliance and effective management. These policies serve as a framework for how the contract pharmacies will operate, detailing their roles, responsibilities, and the operational protocols necessary to adhere to program requirements.

Effective oversight is crucial for compliance with the 340B regulations, which aim to prevent issues such as diversion of 340B drugs to ineligible patients or duplicate discounts on Medicaid claims. By having established policies and procedures, covered entities can systematically monitor contract pharmacies for adherence to the 340B Program's guidelines, making sure that all operations align with federal regulations and organizational goals.

The other options, while important in various contexts, do not address the primary requirement for controlling and overseeing contract pharmacy operations. Human resources policies are vital for maintaining workforce standards, training programs impart knowledge but do not ensure compliance, and financial reports monitor fiscal health but do not establish operational guidelines. Thus, oversight policies and procedures are fundamental for the smooth and lawful functioning of contract pharmacies within the 340B framework.