The GPO Prohibition is established in the 340B statute and applies to disproportionate share hospitals (DSH), children’s hospitals (PED), and free-standing cancer hospitals (CAN). These entities are prohibited from purchasing covered outpatient drugs through GPOs or GPO-like arrangements as a condition of 340B program participation.
Upon enrollment in the 340B program, an authorizing official from these hospital types must attest to compliance with the GPO Prohibition. This attestation is repeated during annual recertification. Compliance requires that covered outpatient drugs be purchased through 340B accounts, not GPO accounts.
The GPO Prohibition is one of the most common compliance issues for hospital-type covered entities. Violations can occur when purchasing systems are not correctly configured, when new drugs are added to formularies without proper account assignment, or when staff are not adequately trained on the prohibition. HRSA evaluates GPO Prohibition compliance during audits.
Frequently Asked Questions
What is the GPO Prohibition?
The GPO Prohibition is a statutory requirement that prohibits DSHs, children's hospitals, and free-standing cancer hospitals from purchasing covered outpatient drugs through GPO arrangements. These entities must purchase covered outpatient drugs through 340B accounts.
How does a covered entity comply with the GPO Prohibition?
Compliance requires that purchasing systems be configured to route covered outpatient drug purchases through 340B accounts rather than GPO accounts. Regular audits of purchasing data should verify that no covered outpatient drugs are being purchased through GPO arrangements.
What are the consequences of violating the GPO Prohibition?
Violating the GPO Prohibition can result in HRSA findings, a requirement to repay the value of improperly obtained 340B savings on the affected purchases, and a corrective action plan. It is a direct compliance violation of the 340B statute.
Why GPO Prohibition Matters
The GPO Prohibition is a direct compliance obligation for DSHs, children's hospitals, and free-standing cancer hospitals. Violations—even unintentional ones resulting from purchasing system configuration errors—can result in HRSA findings and repayment obligations.
How Virtue 340B Uses It
Virtue 340B evaluates GPO Prohibition compliance as a core component of audits for applicable hospital-type covered entities, reviewing purchasing data and account configurations to identify any GPO account usage for covered outpatient drugs.
