Providers Comment on Two 340B Program Integrity Rulemaking Notices

by admin | November 24, 2010 6:30 pm

November 24, 2010—340B providers that lodge overcharging claims against drug companies under a new mandatory dispute resolution process should get access to the data and methods the companies use to set their average manufacturer prices (AMPs) and best prices (BPs), groups representing hospitals and clinics in the drug discount program urged in comments filed with the Office of Pharmacy Affairs (OPA).

In addition, members of the 340B Coalition told OPA that the new civil monetary penalties (CMPs) it can now impose against companies that intentionally overcharge 340B providers should be assessed on a per unit, not per transaction, basis.

Advance Notices of Rulemaking

The 340B participants submitted their comments in response to OPA’s September advance notice that it was drafting rules, per instructions in the Affordable Care Act (ACA), to create a mandatory forum for settling disputes about overcharge claims and allegations of duplicate discounts and diversion. Many covered entities consider OPA’s current voluntary and informal dispute resolution process ineffective.

OPA simultaneously said this fall that it would write regulations, also mandated by health care reform, to set up a process to fine companies that “knowingly and intentionally” overcharge 340B covered entities. The agency previously lacked authority to levy such penalties.

OPA Director Krista Pedley has warned that her agency will not implement the two new regulations if Congress fails to provide her agency with more funding.

Other Comments Unavailable

The deadline for submitting comments on OPA’s two advance notices of proposed rulemaking was Nov. 19. Pharmaceutical Research and Manufacturers of America (PhRMA) also filed comments but a spokesman for the trade group said it would not release them to the public until OPA did so first. It is unclear whether OPA will publish the comments it received on its Web site[1] or through other channels. As of Nov. 24, the federal online clearinghouse on regulations, regulations.gov[2], listed a single comment by an individual on the civil monetary penalties proposed rule. An OPA spokesman indicated that interested parties might have to file a Freedom of Information Act request to access the documents.

BIO, the trade group for biotechnology companies, did not respond to an inquiry about whether it had submitted comments. The Monitor will report on stakeholders’ filings with OPA as they become available.

Coalition’s Main Recommendations

The 340B Coalition’s dispute resolution process[3] (DRP) and civil monetary penalty[4] (CMP) comments called for:

• a simple and streamlined DRP that addresses the imbalance in resources between a typical covered entity and an average-sized manufacturer;
• the DRP to be tailored to the unique nature and problems of the 340B program;
• OPA not to use the current voluntary DRP in any significant way;
• an agency decision maker, whether it be an individual or body of individuals, that is impartial and insulated, to the extent possible, from inappropriate influence and retaliation based on its decisions;
• informal proceedings that protect each party’s right to due process;
• the manufacturer to be asked by the agency decision maker to produce documents to support its determination of a drug’s AMP and BP when the drug’s 340B price is in dispute;
• the decision maker to have authority to conduct fact finding if there are genuine issues of material fact in dispute or if a party requests it;
• the decision maker to issue a written decision detailing the reasons for the decision;
• the decision maker to take mitigating or aggravating factors into account when issuing a decision;
• the Department of Health and Human Services Office of Inspector General (OIG) to oversee the CMP program;
• the “instance” of manufacturer overcharging be defined as an overcharge on a per unit basis, rather than overcharging in a given transaction;
• revenue generated from CMPs to be used to provide OPA and OIG with additional funding; and
• CMP proceedings to be initiated based on a wide variety of sources of information, including spot audits, OPA calculations of 340B prices and DRP findings.

Source URL: https://340bemployed.org/providers-comment-on-two-340b-program-integrity-rulemaking-notices/

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