Preventing Drug Diversion: Essential Controls for 340B Programs

What is Drug Diversion?

Drug diversion occurs when 340B-purchased drugs are dispensed to ineligible patients or used for purposes outside the covered entity's scope. This violates program integrity and can result in severe penalties, including program termination and financial liability.

Essential Diversion Prevention Controls

• Clear patient eligibility criteria aligned with HRSA guidance
• Robust patient registration and verification processes
• Prescription validation and provider relationship confirmation
• Dispensing location controls and inventory segregation
• Regular audits and exception reporting
• Staff training on eligibility requirements and red flags

Patient Eligibility Framework

The 340B statute requires that drugs be used for 'outpatients of the entity.' Covered entities must establish clear criteria defining their patient population, considering factors such as provider relationships, service location, and healthcare record integration. Documentation is critical—maintain evidence of each patient's eligibility at the time of dispensing.

Technology Solutions

Many covered entities implement technology solutions to automate eligibility verification and flag potential diversion risks. These systems can integrate with electronic health records, validate prescriber relationships, and generate exception reports for manual review. However, technology alone is insufficient—robust policies and staff training remain essential.

Monitoring and Continuous Improvement

Diversion prevention requires ongoing vigilance. Conduct regular self-audits, review exception reports, analyze dispensing patterns, and update policies as program operations evolve. CareBridge's Compliance Advisory Retainer provides ongoing support for diversion prevention monitoring and policy refinement.