November 14, 2014—The Health Resources and Services Administration said for the record this morning that, in 2015, it “plans to issue a proposed guidance for notice and comment that will address key policy issues raised by various stakeholders committed to the integrity of the 340B program.” [ms-protect-content id=”2799″]
At the same time and in the same notice on the Office of Pharmacy Affairs home page, HRSA said it is moving forward with proposed rules pertaining to civil monetary penalties for manufacturers, administrative dispute resolution, and the calculation of 340B ceiling prices.
Those announcements came just a few hours after HRSA officially withdrew its proposed comprehensive 340B program regulation.
HRSA elaborated on its reasoning this morning in an emailed response to a request for comment. “As you know, HRSA had drafted a proposed omnibus regulation to address key policy issues,” it said. “In light of a court ruling earlier this year, HHS has determined that the best path forward is to issue proposed rules where the statute is specific about rulemaking. The agency will issue guidance where interpretation of the statutory requirements is needed to inform the implementation of the program.”
Last May, a federal district judge ruled that HRSA lacked authority to issue “legislative” regulations to implement the Affordable Care Act’s 340B orphan drug exclusion. That ruling immediately called into question whether HRSA could issue legislative regulations for the aspects of 340B that the mega-reg was expected to cover, including the 340B definition of patient, contract pharmacy arrangements, hospital eligibility requirements, and enrollment of hospital offsite facilities.
HRSA responded to the court decision by publishing a rule that interprets what the 340B statute requires regarding orphan drugs. The wording of its comment today suggests that the forthcoming guidance will likewise be interpretive rules.
In addition to its 340B orphan-drug language, the Affordable Care Act specifically instructed HHS to issue regulations to impose monetary sanctions on drug manufacturers that intentionally overcharge 340B covered entities, and to establish an involuntary, binding 340B administrative dispute resolution process. The ACA also gave HHS the authority to develop standards and methodology for the calculation of 340B ceiling prices through regulation.
All are examples, as HRSA put it in email to the Monitor today, of where the statute is specific about rulemaking.
In September 2010, HRSA issued advance notices of proposed rulemaking on manufacturer sanctions and the dispute resolution process. It took no further action, however, and said it would not do so until it secured more funding from Congress to administer 340B. Congress finally provided that funding boost last January.
This past September, OPA published an information-collection notice in the Federal Register announcing plans to collect pricing information from manufacturers to help verify the accuracy of 340B ceiling prices, as required by the Affordable Care Act. [/ms-protect-content]