June 5, 2014—Sylvia Mathews Burwell, whose nomination to be the next U.S. Secretary of Health and Human Services is expected to be approved today, will have weighty decisions to make about the 340B program soon after taking office. [ms-protect-content id=”2799″]
The first could come early next month, when the 90-day period ends for White House Office of Management and Budget review of the 340B comprehensive program regulation, or mega-reg. Burwell currently heads OMB. In consultation with other executive branch officials, she will have to decide whether, as HHS Secretary, she has congressional authority to move forward and publish proposed rules for 340B on the four subjects that the mega-reg reportedly addresses: patient definition, contract pharmacy, hospital eligibility requirements, and offsite facility enrollment.
Last month’s federal court decision vacating the 340B orphan drug exclusion regulation raises questions about the extent of HHS’s rulemaking authority over 340B. The judge in that case held that “the rulemaking authority granted HHS by Congress under the 340B program has … been specifically limited, and HHS has not been granted broad rulemaking authority to carry out all the provisions of the 340B program.” The judge, however, left open whether the orphan drug exclusion rule could be deemed valid as “interpretative” rather than “legislative” rulemaking and invited HHS to submit briefs on the issue.
One of the big decisions Burwell will have to make, together with the Justice Department and others, is whether to accept that invitation. It would have to decide relatively soon. Another major decision would be whether to appeal the orphan drug exclusion ruling. That announcement might come by late July.
Some senators asked Burwell tough questions about 340B in writing after they heard from her in person during a Health, Education, Labor, and Pensions Committee nomination hearing on May 8 and a Finance Committee hearing on May 14. She declined to give answers, explaining that she was unable to while the mega-reg was pending.
Sen. Johnny Isakson (R-Ga.) said while the “program is vitally important,” he is concerned about 340B’s expansion under the Affordable Care Act. He asked, “If confirmed, would you be willing to engage in a dialogue about how to better identify the true safety-net providers … who should be the primary focus of programs such as 340B?”
In a similar vein, Sen. Orrin Hatch (R-Utah), a senior member of the HELP Committee, prefaced a question by observing that outgoing HHS Secretary Kathleen Sebelius recently said that 340B had “expanded beyond its bounds.” He wanted to know if the Health Resources and Services Administration would address hospital and offsite location eligibility requirements in the mega-reg. On 340B contract pharmacy, he asked, “If discounts are not passed onto needy patients through contract pharmacy arrangements, what is the direct patient benefit of permitting unlimited contract pharmacies?” Sen. Pat Roberts (R-Kan.) asked a similar question.
During the HELP Committee meeting, Sen. Al Franken (D-Minn.) asked Burwell a question about ways to reduce prescription drugs costs for Medicare beneficiaries. She answered that “the Affordable Care Act took a number of steps to lower drug prices. It strengthened the Medicaid rebate and 340B programs.”
After Burwell appeared before the Finance Committee, Senator Hatch, the panel’s ranking Republican member, asked her in writing again about hospital and offsite location eligibility requirements and contract pharmacy arrangements.
He also asked, “If a hospital lists a child site, such as oncology clinic, on its cost report, [is] the site is expected to provide treatment to uninsured or low-income patients the same way that the hospital is required to treat an uninsured patient that walks into its outpatient facility of the 340B hospital?”
Senator Hatch also wanted to know whether Burwell will “make it a priority to ensure the HRSA rule provides clarity in the program protocols and standards and establishes appropriate guardrails?” [/ms-protect-content]