340B Program Changes Finally on the Fast Track

The U.S. Department of Health and Human Services (HHS) has issued a proposed rule that would speed up implementation of its previously issued 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation (the “Final Rule”). The proposed rule would move up the effective date of the Final Rule by six months, from July 1, 2019 to January 1, 2019.

The Final Rule was issued on January 5, 2017, as an effort to prevent drug manufacturers from intentionally overcharging providers for drugs purchased through the 340B Drug Pricing Program, which is administered by HHS’s Health Resources and Services Administration under Section 340B of the Public Health Services Act.  Under the 340B Program, eligible providers can obtain certain outpatient drugs to be distributed to eligible patients at significantly reduced prices. The Final Rule sets forth ceiling prices for 340B eligible drugs and imposes civil monetary penalties on manufacturers that charge 340B providers in excess of such ceiling prices. Manufacturers would be subject to up to $5,000 in penalties for each transaction in which they intentionally and knowingly charge an above-ceiling price for 340B drugs. The HHS Office of Inspector General would be tasked with enforcing the Final Rule and imposing the penalties.

HHS had repeatedly delayed implementation of the Final Rule to give itself time to develop new policies and procedures to ensure accuracy in calculating 340B drug ceiling prices and monitoring compliance, but the necessary changes now appear to be nearly complete. Public comments on the proposed rule will be accepted until November 23, 2018, at which time HHS will decide whether to make it final.