March 3, 2017—In accordance with the Trump administration’s regulatory freeze, the Health Resources and Services Administration yesterday pushed back the effective date of its 340B ceiling price and manufacturer civil monetary penalties regulation 15 days, from March 6 to March 21. [ms-protect-content id=”2799″]
HRSA said there’s no change in the date it plans to begin enforcing the regulation: April 1, the first day of the second calendar quarter.
HRSA posted the announcement for public inspection late yesterday morning. It will be formally published in the Federal Register March 6.
“The temporary delay in the effective date of this final rule is necessary to give department officials the opportunity for further review and consideration of new regulations” consistent with the administration’s regulatory freeze, HRSA explains in the announcement.
The regulation should help prevent the drug industry from overcharging 340B hospitals and other healthcare providers. In addition to specifying how 340B ceiling prices should be calculated, under the regulation a drug manufacturer that knowingly and intentionally overcharges a 340B hospital or other 340B provider can be fined up to $5,000 for each instance of overcharging. Manufacturers also will have to ensure that their distributors give providers the 340B ceiling price.
The regulation also:
- Reaffirms and incorporates HRSA’s long-standing policy requiring a manufacturer to sell a drug at a penny if the manufacturer raises the drug’s price to such a high degree that it triggers an inflationary penalty and results in a 340B ceiling price calculation of $0.00
- Requires manufacturers to offer refunds for overcharges on new drugs instead of maintaining the current rule requiring covered entities to request refunds
- Makes the Department of Health and Human Services Office of Inspector General responsible for imposing 340B manufacturer civil monetary penalties, given OIG’s extensive experience applying CMPs in other contexts
The final rule cites data showing that 340B sales still make up only a tiny percentage (2.6 percent) of the overall U.S. drug market. [/ms-protect-content]