A recent OIG report examined potential problems associated with the growing use of contract pharmacies under the 340B discount drug program. The OIG describes these arrangements as when a 340B covered entity, such as a community health center or disproportionate share hospital, contracts with a pharmacy to dispense drugs purchased through the 340B program on the entity’s behalf. In short, based on interviews with covered entities and 340B administrators, the OIG found that some contract pharmacy arrangements create inconsistencies with regard to which prescriptions are treated as 340B eligible. Contract pharmacies also may not make necessary arrangements to prevent duplicate discounts (when a drug manufacturer pays a Medicaid drug rebate program on a drug sold at the already-discounted 340B price). The OIG also found that most covered entities it reviewed did not conduct all of the oversight activities recommended by the Health Resources and Services Administration (HRSA). In discussing its findings, the OIG stated that it was not making recommendations since HRSA has announced plans to propose new regulations for the 340B program this year the OIG’s results are intended to inform HRSA’s efforts. The OIG also intends to continue monitoring the issue.