The 340B pharmacy program is transforming healthcare for tribal health members, providing expanded access to affordable medications and generating significant revenue for tribal enterprises. This initiative is not only enhancing healthcare services but also offering tribes a lucrative opportunity to diversify income streams beyond gaming. This topic was presented at Raving NEXT 2025.
Understanding the 340B pharmacy program
The 340B program enables eligible healthcare providers to purchase medications at the lowest prices available in the country. For tribal clinics and pharmacies, this means a substantial reduction in medication costs, allowing them to pass those savings on to patients while also receiving high reimbursements from insurance. The program ultimately strengthens healthcare infrastructure within tribal communities and ensures better access to essential medications.
This session delved into the key aspects of the 340B program, including:
- How it benefits tribal healthcare systems by making medications more accessible and affordable.
- How tribes can use 340B to generate revenue and sustain healthcare operations.
- The ease of applying for and implementing the program and debunking common misconceptions that it is overly complex.
Case study: Absentee Shawnee Tribal Health System
The Absentee Shawnee Tribal Health System offers a compelling success story demonstrating the power of 340B in transforming tribal healthcare and revenue generation.
From a small clinic to a thriving health system
- The health system originally operated from a 500-square-foot corner in a casino with just three employees: one doctor, one nurse, and one receptionist.
- Over time, it expanded significantly, establishing a 150,000-square-foot flagship facility and an additional 76,000-square-foot expansion.
- Today, the system serves 28,000 enrolled members, conducts 18,000-20,000 patient encounters per month, and employs 400 staff, including 100 providers.
Chris Larkin, CEO of Absentee Shawnee Tribal Health System, shared, “We started out in just a small corner of our casino with only three employees. Now, we’ve grown into a major healthcare system that serves thousands every month. The 340B program has been a game-changer for us.”
The financial impact of 340B
- The clinic and pharmacy together generate $1.6 million per month in profits.
- 340B savings amount to $6–8 million annually.
- Certain high-cost medications, such as Ozempic (used for diabetes management), cost as little as $114 under 340B, whereas traditional purchasing models price them at over $2,000.
- Medications like Humira cost only 1 cent per dose under 340B pricing, yet reimbursements generate thousands of dollars per script.
Dr. Marty Lofgren, Medical Director of Absentee Shawnee Tribal Health System, added, “The savings on medications have allowed us to invest in better treatments for our patients. We are now able to prescribe newer, more effective medications without worrying about the financial burden.”
Key takeaways from the session
1. 340B is a powerful revenue generator
Many tribes hesitate to explore 340B due to misconceptions about complexity, but those that have implemented it, like Absentee Shawnee, report substantial financial benefits—often outpacing casino revenue.
“We were initially hesitant about the process, thinking it would be complicated,” said Larkin. “But once we started, we realized it was much easier than we thought. Now, we can’t believe we waited so long to do this.”
2. Establishing a 340B clinic or pharmacy is easier than it seems
- Many assume the 126-page application is cumbersome, but tribes only need to complete a three-page section.
- The application process takes about 10 minutes, and approval usually comes within two weeks.
- Tribes do not need to implement the program immediately after approval, allowing flexibility in planning.
3. Medicaid and insurance billing create additional revenue
- Medicaid OMB reimbursement provides $801 per patient visit, compared to $35-$50 for traditional Medicaid billing.
- For example, a single 45-minute provider visit for a mother and three children with flu-like symptoms can generate over $4,300 in reimbursement.
4. Non-Native patients can be seen under the program
- The clinic and pharmacy can serve both Native and non-Native patients, creating additional revenue streams.
- However, tribes must ensure Native patients always receive priority care.
5. Partnerships with existing providers can streamline implementation
- If a tribe lacks the infrastructure to open a clinic or pharmacy, it can partner with turnkey service providers.
- Many companies specialize in setting up fully operational clinics and pharmacies on tribal land.
- Absentee Shawnee worked with PBM Solutions, which provides weekly compliance audits, ensuring long-term adherence to 340B regulations.
Steps for tribes to get started
- Establish a tribal clinic or pharmacy.
- This can be a full-time or part-time clinic.
- Telemedicine can also qualify.
- Register for the 340B program.
- Applications are accepted in the first 15 days of each quarter.
- Approval takes approximately 90 days.
- Secure third-party billing and compliance support.
- Organizations like PBM Solutions assist with regulatory compliance, weekly audits, and financial oversight.
- Utilize available funding and grant opportunities.
- Tribes receive 40% of their operational costs reimbursed by IHS.
- Pre-award and startup grants are available for new clinics.
- Medicaid reimbursement and third-party insurance payments further support financial sustainability.
Final thoughts
The 340B program offers an incredible opportunity for tribes to enhance healthcare access, generate substantial revenue, and strengthen their healthcare systems. Many tribes hesitate due to concerns about complexity, but as demonstrated by the Absentee Shawnee experience, the process is straightforward and highly beneficial.
Tribes considering a clinic or pharmacy should apply for the 340B designation as soon as possible—even if they do not plan to use it immediately. Federal policies can change, and securing eligibility now ensures tribes retain access to cost-saving benefits in the future.
“If you’re even remotely considering a 340B pharmacy, apply now,” advised Larkin. “Even if you don’t use it right away, it’s better to be on the list before any policy changes occur.”
For those ready to explore 340B further, working with experienced consultants and pharmacy partners can streamline the process and maximize its financial impact.
Now is the time for tribal organizations to unlock the secrets of 340B and transform their healthcare and economic landscape.
For more information and your free consultation on setting up 340B, please contact Face Rock Enterprises at https://facerockllc.com/contact-us/
