January 26, 2011—The Health Resources and Services Administration (HRSA) has sent the White House a new definition of “patient” for purposes of 340B drug discounts for review prior to its publication in the Federal Register.
According to an agency spokesperson, HRSA also intends to formally withdraw its controversial January 2007 proposed patient definition, which provider groups strongly opposed and kept bottled up for four years with help from 340B backers in Congress.
The Office of Management and Budget (OMB), which reviews all drafts of proposed and final federal agency regulations, disclosed the HRSA submissions on its Web site on Jan. 21. Although such reviews are technically required to last no more than 90 days, the head of an agency making the submission can extend the review indefinitely, as was the case with the 2007 proposal.
Contents Are Unknown
The contents of HRSA’s new proposed definition are unknown. It is also unclear whether the notice under review is “proposed,” “final” or “interim.” A HRSA spokesperson said it was submitted in the form of a “notice with comment,” but added that this designation could change during the review process. Comparable notices recently promulgated by different agencies took effect either immediately or in a matter of weeks or months.
How the agency chooses to define “patient” has a cascading effect throughout the entire 340B program, directly affecting the kinds and quantities of drugs that enrolled providers can buy at deeply discounted prices.
Proposed Restrictions Decried
Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents more than 600 hospitals enrolled in 340B, argued that the 2007 proposed definition was far too restrictive and would have imposed an enormous burden on pharmacists and other providers to verify patient eligibility. Together with other 340B provider groups, it said that if the proposed guidelines were published, they would have undermined providers to such a degree that many would have been unable to continue to serve their indigent and uninsured patients.
The drug industry, meanwhile, has long contended that 340B providers have stretched the current guidelines, which were issued in 1996, much too broadly, leading to impermissible drug diversion. The National Community Pharmacists Association (NCPA), which represents independent pharmacies, has taken a similar position, arguing that the definition should be strictly limited to indigent and uninsured patients. Not all independent pharmacies share this view, however, as many serve as 340B contract pharmacies.
SNHPA officials say they hope the final guidelines will reflect the changes that they and other 340B provider groups recommended. They say they are concerned, however, that common uses of the program, such as for employees and other populations receiving covered entity services outside covered entity facilities, may be in jeopardy.