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August 18, 2017

Trump admin looks to delay 340B drug program rule, again

Daily Briefing

HHS in a proposed rule published Thursday in the Federal Register sought to again delay a policy that would penalize drugmakers that deliberately overcharge providers for drugs purchased under the 340B drug discount program.

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The federal 340B program requires drug manufacturers to provide outpatient drugs to eligible health care providers at discounts ranging from 20 to 50 percent. The program, created by Congress in 1992 and expanded under the Affordable Care Act, focuses on hospitals with disproportionately low-income patient populations. About 40 percent of U.S. hospitals are eligible to participate in the program, which saved providers about $3.8 billion in medication costs in 2013, according to the Health Resources and Services Administration.

However, the program has come under scrutiny, with some questioning the amount of charity care participating hospitals are providing. 

HHS proposes further delay to 340B program change

The proposed rule would delay until July 2018 the effective date and enforcement of a final rule issued under former President Barack Obama's administration that, among other things, would subject drugmakers that "knowingly and intentionally" overcharge providers for drugs purchased through the 340B program to a fine of up to $5,000 per offense. Further, the policy requires drugmakers to offer refunds for overcharges on new drugs once the overcharges are discovered, rather than requiring providers to request refunds, as currently is required.

The rule originally was scheduled to take effect Feb. 28 and the federal government was scheduled to begin enforcing the rule on April 1. However, HHS delayed the effective date after stakeholders said some of the rule's restrictions were too narrow. In March, HHS in an interim rule again delayed the rule's implementation until May 22, and then HHS in May issued a final rule that further delayed implementation until Oct. 1.

HHS in the proposed rule stated that the latest delay is intended to "allow a more deliberate process of considering alternative and supplemental regulatory provisions and to allow for sufficient time for additional rulemaking." Further, HHS wrote, "Additional time is needed to more fully consider previous objections regarding the timing of the effective date and challenges associated with complying with the rule, as well as other objections to the rule."


Some industry stakeholders expressed frustration with the additional delay.

Ashley Thompson, senior vice president for public policy analysis and development at the American Hospital Association, said the delays "are unjustified given the exhaustive rule development process that has already occurred."  She added, "Given the skyrocketing prescription drug price increases that have presented hospitals and their patients with remarkable challenges, the 340B program is as critical as it has ever been in helping eligible hospitals obtain a reduced price for outpatient drugs, allowing them to stretch scarce federal resources to expand and improve access to comprehensive health care services for our nation's most vulnerable patients."

Ted Slafsky, CEO of 340B Health, said, "There is no reasonable excuse for delaying this regulation any longer," adding, "Nor is there any good reason for reopening the matter for further rulemaking, as the [Trump] administration proposes" (AHA News, 8/17; Siddons, CQ HealthBeat [subscription required], 8/17; Minemyer, FierceHealthcare, 8/17; Lee, Modern Healthcare, 8/17).

Also this month: Streamline PA processes for provider-administered drugs

Prior authorization (PA) processes have long been an administrative burden for providers. In recent years, securing PAs has become even more difficult due to increasing requirements and greater variation in health plan benefit structure.

To help provider organizations streamline PA processes, this web conference will provide best practices for staffing, process redesign, improving information flow, and working with payers to reduce PA requirements.

Register for the Webconference

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