Dive Brief:

• The Health Resources and Services Administration has released a draft omnibus guidance to clarify eligibility for the 340B Drug Pricing Program, which requires drug manufacturers to provide hospitals and health clinics with discounts ranging from 20% to 50% for outpatient drugs.
• The guidance was written to address growing criticism that the program lacks oversight and has become too inclusive, with one third of all hospitals now taking advantage of it. Critics say its use by providers with a small proportion of low-income patients is inappropriate.
• The guidance suggests numerous changes to narrow the circumstances that allow a patient's eligibility for discounted drugs. When finalized, "the guidance is intended to assist 340B covered entities and drug manufacturers in complying with the statute," the notice states.

Dive Insight:

Among the proposed changes in HRSA's guidance are an increase in the number of conditions that patients must meet to be consdered a patient of a covered entity.

The six conditions include: 

1. The individual receives service at a facility or clinic that is registered for the program and listed on the public 340B database. 
2. The individual receives a service provided by a covered entity provider who is either employed by  or an independent contractor for the covered entity, so the entity can bill on behalf of the provider.
3. The individual's drug is ordered or prescribed by the provider as a result of the service described.
4. The individual's healthcare is consistent with the scope of the federal grant, project, designation, or contract. 
5. The individual’s drug is ordered or prescribed pursuant to a healthcare service classified as outpatient. 
6. The individual’s patient records are accessible to the covered entity and show that the entity is responsible for care. 

Critics of the mega-guidance suggest the limits would negatively impact access to the program among small and rural hospitals. Public comment is being taken until Oct. 27.