PSAO (Pharmacy Services Administrative Organization)

A Pharmacy Services Administrative Organization (PSAO) provides administrative and contracting services to independent pharmacies, helping them participate in payer networks, negotiate contracts, and manage administrative functions. PSAOs aggregate the contracting power of multiple independent pharmacies.

In the 340B context, PSAOs may facilitate independent pharmacy participation in 340B contract pharmacy arrangements by providing the administrative infrastructure for contracting with covered entities. Independent pharmacies that participate in 340B contract pharmacy arrangements through PSAO support can extend covered entities’ pharmacy networks beyond large chain pharmacies.

For covered entities seeking to expand their contract pharmacy networks to include independent pharmacies, PSAOs can be a useful contracting partner.