- HHS has proposed enforcing ceiling prices for the 340B drug pricing program beginning Jan. 1, after multiple hospital groups sued the agency for delaying enforcement five times, most recently in June. The agency had earlier set the start date was for July 1 of next year.
- The ceiling prices will limit how much drug manufacturers can charge 340B hospitals for their products, one of many controversies surrounding the oft-disputed drug pricing program.
- Hospital groups and 340B advocates lauded the proposed regulation, but considering the history of HHS delays, remain cautious. The pharmaceutical industry has expressed disappointment in the proposal. CMS is accepting comments on the proposed rule through Nov. 24.
The multiple delays in enforcing ceiling prices have caused much strife among 340B hospitals which have said the lack of enforcement has confused providers, leaving them unaware what their competitors pay for the same drugs, and allowed drugmakers to charge arbitrary prices for their products.
It's one of many reasons the drug pricing program has been at the center of multiple lawsuits, congressional hearings and White House scrutiny. While safety net hospitals and their allies claim the opaque nature of the 340B drug pricing program allows drugmakers to overcharge for their products, pharmaceutical companies and pharmacy benefit managers argue that hospitals aren't passing on the savings from the program to their patients.
This proposed regulation, and the creation of an online database that makes prices transparent, should help demystify and clear up some controversy surrounding the longstanding program.
Melinda Hatton, General Counsel to the American Hospital Association, said she is pleased that HHS proposed the ceiling start date in response to her group's lawsuit.
"We encourage HHS to stick by this commitment and to publish the final rule in time to meet that deadline," Hatton said in a statement.
Bruce Siegel, President of America’s Essential Hospitals, which was also involved in the lawsuit, echoed that sentiment.
Maureen Testoni, Interim CEO of advocacy group 340B Health, called on the Health Resources and Services Administration, which is responsible for overseeing the 340B pricing program, to create a "secure website containing the ceiling prices for all 340B-eligible drugs as quickly as possible."
PhRMA, the drugmaker lobby, has said in the past that it "supports regulations on ceiling price calculations and civil monetary penalties that are in line with the 340B law and eliminate needless regulatory burdens on manufacturers." The organization has also stated support for making a 340B ceiling price database operational "as soon as possible."
However, the group changed its tune with this new development, saying in a statement that it is disappointed that HHS "failed to take into account the extensive public comments indicating this rule’s flawed policies and decided to move up the it’s deadline by 6 months without good cause or justification."
The rule, PhRMA said, places "significant burden and risk on manufacturers participating in the 340B program," and the group expressed concern over the rule's legality.
"It was our hope that this Administration’s first 340B regulation would move away from market distorting policies, not finalizing such costly and burdensome policies," the statement reads.