HRSA to Issue Three More 340B Regulations

by admin | March 6, 2014 3:52 pm

March 6, 2014—While attention has focused on the forthcoming comprehensive regulation for the 340B program, aka the “mega-reg,” the Health Resources and Services Administration is moving ahead with three other significant program regulations. [ms-protect-content id=”2799″] One would create a mandatory administrative dispute resolution process for 340B, another would impose fines on drugmakers for knowing and intentional overcharges, and the third would impose fines on safety-net providers for violating the 340B statute knowingly and intentionally and remove them from 340B for systematic and egregious misconduct.

The three regulations, two of which are required under the Affordable Care Act, will be issued separately from the multi-faceted 340B regulation that HRSA plans to publish in June, an agency spokesperson said today. HRSA has previously said that this rule will address the definition of an eligible patient, compliance requirements for contract pharmacy arrangements, hospital eligibility criteria, and eligibility of off-site facilities.

Congress gave HRSA 180 days from the enactment of the ACA in March 2010 to promulgate regulations to establish and implement the 340B dispute resolution process and to set standards for the 340B manufacturer civil monetary policies. HRSA published advanced notices of proposed rulemaking for both on Sept. 20 of that year and accepted comments on both through Nov. 19, 2010. There has been no further action on either rule since that time. Congress authorized financial and other sanctions for 340B covered entities in the ACA but did not explicitly require HRSA to issue implementing regulations.

The administrative dispute resolution process would be the forum for claims by covered entities that they have been overcharged for drugs purchased through 340B, and claims by manufacturers, after auditing a covered entity, of violations of the prohibitions against drug diversion and duplicate discounts.

HRSA’s Office of Pharmacy Affairs had explained on many occasions during the past four years that, in the absence of additional funding, it could not implement these and other 340B program improvements called for in the ACA. In January, Congress boosted OPA’s line-item appropriation from $4.2 million in fiscal 2013 to $10.2 million in the current fiscal year that ends Sept. 30 and instructed OPA to use the additional money to strengthen program oversight. Yesterday, the Obama administration requested $17.2 million for OPA in fiscal 2015, $7 million of which would come from a proposed 0.1 percent user fee on 340B purchases. This is the fourth year that the administration has proposed the user fee in its budget request to Congress.

In response to a request for comment on how OPA intended to use its additional $6 million in fiscal 2014 funding, a HRSA spokesperson late yesterday confirmed a previously published report that the agency plans to invest the additional resources on:

• Staff to conduct analysis of information gleaned from OPA’s expanded 340B program integrity efforts.
• Staff to conduct additional 340B program audits.
• Information technology systems to more effectively track entity and manufacturer compliance, including reconstituting OPA’s pricing database to allow manufacturer price reporting, price validation, and covered entity access to pricing.

“The new investments in our pricing database will allow us to fulfil our statutory obligations under ACA,” the spokesperson said. “We do not yet have a timeline for these activities.”

In the meantime, the spokesperson said HRSA “will continue to build upon current activities around manufacturer compliance,” including:

• Reviewing all discrepancies brought to HRSA’s attention. “If a covered entity is unsure whether they were overcharged, they can contact HRSA to verify whether the price charged exceeded the 340B ceiling price,” the spokesperson said.
• Spot checking 340B prices as needed for compliance (i.e., if an allegation is received or if a manufacturer reports it has to make a price adjustment).
• Running pricing discrepancy reports by comparing the calculated 340B ceiling price by HRSA with the manufacturer reported prices to the wholesalers through the 340B Prime Vendor.
• Requiring refunds/credits when a covered entity has been overcharged and that information is made publicly available on the OPA website.
• Providing technical assistance and education to manufacturers regarding compliance through OPA, the Prime Vendor, and 340B University.

OPA Director Cmdr. Krista Pedley touched on these and other related manufacturer oversight activities in a “Dear Colleague” letter emailed to 340B stakeholders today and posted on the OPA website[1].

“As I talk with different parts of the 340B community about our new efforts around program integrity, I’m often asked about our oversight of manufacturers,” Pedley wrote. “While the work has not received as much attention, manufacturer compliance is a critical component of our program integrity strategy. Manufacturers only have one statutory obligation: to provide covered outpatient drugs to participating covered entities at no greater than the 340B ceiling price….We operate a multi-faceted oversight effort to prevent and correct any pricing discrepancies.”

“Moving forward, we are continuing to look at ways to enhance compliance oversight of manufacturers,” the letter concludes. “We are in the process of considering new elements to add to those already existing to strengthen our efforts.” [/ms-protect-content]

Source URL: https://340bemployed.org/hrsa-to-issue-three-more-340b-regulations/

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