The Drug Supply Chain Security Act (DSCSA) and the 340B Drug Pricing Program each play vital roles in patient safety, supply integrity, and healthcare value. However, together they introduce unique compliance and operational challenges — especially as DSCSA serialization and verification expectations mature in 2026 and beyond. This white paper breaks down these challenges and outlines practical strategies to ensure covered entities remain compliant while maximizing operational efficiency and program value.
Why this matters
Recent manufacturer restrictions on 340B contract pharmacy pricing have meant significant financial losses for Covered Entities and pose a critical threat to their ability to provide quality care to those who most need it. Amid these challenges, 340B ESP™ (Eligibility and Submissions Portal) emerges as a critical factor in addressing these financial setbacks. The success of leveraging 340B ESP™ largely hinges on a 340B ESP™ strategy, which includes sufficient resources and specialized subject matter expertise. It’s up to the covered entity to put that strategy into place.
What is 340B ESP™?
Enhanced DSCSA requirements now place greater emphasis on serialized transaction data and verification workflows, which can create friction in 340B arrangements where the product owner (covered entity) differs from the physical receiver/dispensing site (contract pharmacy). This intersection is particularly important for healthcare systems managing multiple contract pharmacies, drop-ship workflows, and return processes.
At its core, the DSCSA was enacted to improve patient safety and supply chain traceability by requiring interoperable, electronic tracking of serialized product movement. This includes:
- Serialized transaction data (TSR) for each package regulated under the law
- Verification workflows that link the physical product to its associated serialized data
- Documented procedures demonstrating how entities comply and respond to discrepancies
In essence, DSCSA is about ensuring that the medications patients receive are legitimate, traceable, and accounted for — from manufacturer to dispenser. Pharmacies and covered entities must develop workflows that ensure product verification and documented compliance.
340B Amid Enhanced DSCSA Guidelines
In most 340B program setups, the covered entity is the owner of the product (legally responsible), while the contract pharmacy is the site that physically receives and dispenses the product. This can create two unique challenges under DSCSA:
- Data access discrepancy: Serialized data may go only to the “sold to” party, leaving the ship-to contract pharmacy without the information it needs for verification.
- Verification responsibility: DSCSA requires the physical receiver to verify legitimacy — but that occurs at the contract pharmacy, not the covered entity.
These logistical nuances can lead to compliance vulnerabilities if not carefully managed.
Best Practices for Covered Entities
Align Trading Partner Data Flows
Verify that wholesalers and solution providers are configured so that serialized transaction data is accessible where it’s needed most — ideally at both the “sold to” (covered entity) and “ship to” (contract pharmacy) locations.
- Audit account configuration for each wholesaler
- Confirm where serialized data is sent and stored
- Ensure contract pharmacies can retrieve the data they need independently
Document Standard Operation Procedures (SOPs)
Your policies and procedures should explicitly include 340B-specific considerations, such as data access responsibilities, verification steps, and roles for exceptions (e.g., returns, mismatches). A documented SOP is both a compliance tool and an operational readiness tool.
SOPs should include:
- How contract pharmacies access serialized data
- Verification standards and tools
- Escalation criteria for unresolved mismatches
Streamlining Data Submission
How can you optimize your process for data submission? By collaborating with your Third-Party Administrator (TPA). Partnering together to streamline your reporting processes and maintain standardized data submission protocols better prevents errors and enhances efficiency.
Start by identifying the available reports from your TPA to obtain required claims data. Many, but not all, TPAs will have a standard report. If your TPA does not have a standard report, utilize a claims detail report and filter for only the required fields and NDCs that are needed for your 340B ESP™ submission.
To reduce any errors during data upload to 340B ESP™, a standardized reporting and uploading process is essential. Create a column mapping in 340B ESP™ for each TPA file format to ensure data accurately imports and become familiar with common errors when uploading (ex. NDC format).
Best Practices for Contract Pharmacies
Verification at Receipt
When products arrive under a 340B order, contract pharmacies must verify the serialized data before adding items to inventory. This is a cornerstone of DSCSA compliance.
Common approaches include:
- Scanning two-dimensional barcodes
- System match between physical product and serialized metadata
- Exception logging and escalation
Contract pharmacies should have defined processes with the covered entity for handling missing data, mismatches, or delayed transaction statements.
Operational Scenarios to Plan For
Scenario A: Alternate Distribution Models (ADM)
In an alternate distribution model, the covered entity takes physical possession of product and then redistributes it to one or more contract pharmacies. Operationally, that “two-leg” movement can introduce DSCSA responsibilities that feel closer to a wholesale-type handoff than a traditional direct-to-pharmacy shipment. The key risk is continuity: serialized product information must remain accurate and connected as the product moves from the manufacturer/wholesaler to the covered entity—and then from the covered entity to the dispensing location.
To manage this well, organizations should ensure they can reliably receive, validate, and transmit serialized data for the second leg without introducing gaps or “re-created” records that don’t match the physical packages. ADM workflows also require the right identifiers to support traceability across partners—GS1 identifiers (including a Global Company Prefix) are specifically relevant when the covered entity is effectively participating in downstream traceability events.
Scenario B: Saleable Returns
Serialized operations raise the bar for saleable returns. In many return workflows, wholesalers require the exact serial number for each returned package and will reconcile what they receive against what was submitted. If a returned package and its serialized record do not match—even when the drug and lot are correct—the item can be quarantined, and the return can be delayed or rejected.
For 340B, the operational priority is preventing “crossed wires” between physical inventory and its associated serialized documentation. Return processes should be designed so that the specific package selected for return is the same package represented in the serialized return details, and roles are clear when a return is initiated by the covered entity but shipped from a contract pharmacy location.
Conclusion
DSCSA compliance for 340B does not need to be disruptive if it is treated as an operational discipline that aligns serialized data with the way 340B product is purchased, shipped, verified, and returned. In practice, that means ensuring the contract pharmacy location responsible for verification has appropriate access to serialized data in sold-to/ship-to arrangements, confirming wholesaler account configurations, and documenting clear DSCSA roles and SOPs that reflect 340B realities.
High-impact scenarios—such as alternate distribution models that can create wholesaler-like traceability requirements and saleable returns where serial mismatches can trigger quarantine—should be addressed explicitly to support a resilient, audit-ready 340B program that advances patient safety and supply chain integrity.
