HRSA Proposes Advancing Implementation of 340B Penalties Rule

Health Update

On November 2, 2018, the federal Health Resources and Services Administration (HRSA) issued a proposed rule that would advance the implementation date for the oft-postponed 340B Ceiling Price and Civil Monetary Penalties regulation to January 1, 2019—six months earlier than the currently scheduled implementation date of July 1, 2019. The rule will:

  • Implement civil monetary penalties for pharmaceutical manufacturers that knowingly and intentionally charge 340B covered entities a price in excess of the 340B ceiling price for a 340B covered drug
  • Require manufacturers to determine 340B ceiling prices quarterly
  • Require manufacturers to charge 340B covered entities one penny for drugs when the 340B ceiling price is zero

The rule was initially slated to go into effect on March 6, 2017, but was delayed several times—first in connection with the Trump administration’s regulatory freeze, which directed federal agencies to delay any not-yet-effective regulations for 60 days, and most recently to allow HRSA to engage in what it described as a “more deliberate process of considering alternative and supplemental regulatory provisions.” In issuing the proposed rule advancing the implementation date, HRSA indicated that it had determined that the finalization of the rule would not interfere with the development of comprehensive policies on drug pricing in federal healthcare programs. 

Comments on the proposed rule are due no later than November 23, 2018.

NOTE: Manatt has created a new infographic to illustrate how the 340B program works in a hospital setting, when patients are eligible for 340B drugs (and when they are not) and the circumstances under which hospitals can use 340B drugs for Medicaid patients—all in a simple, one-page diagram. Click here to view the infographic free.    

The 340B infographic was developed for Insights@ManattHealth, our one-stop proprietary portal that provides a searchable archive of all of Manatt Health’s content and features premium content that is available only to subscribers. Among other things, subscribers have access to weekly updates of key federal and state health policy activity; detailed summaries of federal Medicaid, Medicare and Marketplace federal regulatory and subregulatory guidance; 50-state surveys on a range of critical healthcare topics; and much more. If you are interested in learning more, please contact Insights@Manatt.com.