HRSA proposes to delay 340B drug pricing, overcharge penalties for drug manufacturers for fifth time

May 14, 2018

The Health Resources and Services Administration (HRSA) recently proposed to delay the implementation of a final rule for the 340B drug pricing program that could lead to fines for drug manufacturers from July 2018 to July 2019.

This is the fifth postponement of a 2017 final rule which imposes a $5,000 penalty on drug manufacturers that knowingly and intentionally charge more than the ceiling price for an outpatient drug covered under the 340B drug pricing program.

The final rule also clarifies a penny pricing methodology for 340B drugs to be used by manufacturers when estimating the ceiling price for a new covered outpatient drug. Under this methodology, manufacturers must charge 1 cent for each unit of a drug when the ceiling price calculation equals zero, according to the final rule.

HRSA had planned to implement overcharge penalties and the penny pricing methodology on March 6, 2017, but delayed the implementation several times to give stakeholders time to prepare for the 340B changes. The rulemaking was also delayed in response to Trump’s regulatory freeze in January 2017.

According to HRSA, further postponement of the program’s implementation will not adversely affect stakeholders in a meaningful way.

“As discussed in the January 5, 2017 final rule, a small number of manufacturers have informed HHS over the last several years that they charge more than $0.01 for a drug with a ceiling price below $0.01…” HRSA states in the proposal. “Therefore, the delay of this portion of the regulation would not result in a significant economic impact.”

Although the delay in penny pricing is not expected to significantly impact hospitals, the American Hospital Association (AHA) does not support the delayed implementation of civil monetary penalties on manufacturers that overcharge hospitals for 340B drugs. 

“We are once again very disappointed in this proposed delay of the 340B ceiling price and civil monetary penalties rule, especially considering that HRSA began rulemaking on this issue more than seven years ago,” said AHA Executive Vice President Tom Nickels in a statement.

Other advocates for the program such as America's Essential Hospitals (AEH) and 340B Health agree that the proposed measures are long overdue, according to HealthLeaders Media.

Click here for more information or to submit a comment through May 22.