Feds Propose Delay of 340B Enforcement Rules

HRSA claims delay will have no impact on current stakeholders.

The Health Resources and Services Administration (HRSA), which administers Section 340B of the Public Health Service Act, has published a proposal to delay for another year the ceiling price and civil monetary penalties regulation that was originally issued by the outgoing Obama Administration in January 2017. It was formally published Monday, and public comments are due by May 22.

In its proposal, HRSA said it believes it would be counterproductive to effectuate the final rule prior to issuance of additional or alternative rulemaking on these issues.

“The HHS (U.S. Department of Health and Human Services) is in the process of developing new comprehensive policies to address the rising costs of prescription drugs. Those policies will address drug pricing in government programs, such as Medicare Parts B and D, Medicaid, and the 340B discount drug program,” the proposal read. “Accordingly, we are proposing to delay the effective date of the final rule entitled ‘340B Drug Pricing Ceiling Price and Manufacturer Civil Monetary Penalties Regulation.’”

HRSA also said the proposal is currently scheduled to go into effect on July 1, 2018, but that the agency is proposing to delay further the effective date to July 1, 2019.

“We do not believe that this delay will adversely affect any of the stakeholders in a meaningful way,” HRSA said. 

“The federal government’s decision to delay – for the fifth time – enforcement of critical 340B program rules policing drug manufacturer pricing behavior will leave safety net providers and their patients vulnerable to paying more than they should for outpatient prescription drugs,” said 340B Health in a news release posted to its website. The organization, which says it represents more than 1,300 hospitals and health systems participating in the 340B drug pricing program, is calling on the government to begin enforcing the rule without further delay.

“The proposal asks for public comments, but only gives 15 days for those to be made (usually the government gives 60 or even 90 days), so indications are they have their mind made up,” a spokesperson for the organization said in an email to RACmonitor. “In the proposal, they (HRSA) actually say, ‘HHS is soliciting public comments for a shortened 15-day period because parties have had ample opportunity to comment on the two prior delays of the effective date of the underlying 340B regulation, and the impact of this delay on the regulated community is de minimis.’ None of the hospital groups agree with that.”

The 340B drug pricing program gives safety-net providers relief from high drug prices and the ability to use those savings to fund critical programs for low-income and rural patients. In 2010, Congress called for rules establishing civil monetary penalties for drugmakers that “knowingly and intentionally” charge more than the law allows for 340B drugs.

“There is a clear history of manufacturers overcharging 340B providers. Delaying enforcement of this rule will have a tremendous adverse impact on hospitals, clinics, and health systems caring for low-income and rural patients,” Maureen Testoni, interim president and chief executive officer of 340B Health, said in a news release. “It has been eight years since Congress directed HHS to establish these vital consumer protections, and they are long overdue. We are calling on the administration to enforce the law as written and make sure manufacturers aren’t overcharging for their products.”

Hospitals participating in 340B provide 60 percent of the nation’s uncompensated and unreimbursed care and provide vital services including HIV/AIDS care, opioid addiction treatment, and trauma care. On average, 42 percent of the patients these hospitals serve have income low enough to qualify for Medicaid, according to the association.

Program Note:

Listen to Monitor Monday on May 14, 10-10:30 a.m. for the latest news on the 340B Drug program.

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