- After facing scrutiny from the Senate and the White House, HHS Friday pushed back a decision on the 340B Drug Pricing Program that would impose civil monetary penalties for drug manufacturers that knowingly and intentionally overcharge hospitals for outpatient drugs to July 2019.
- According to a statement, HHS is delaying the decision to "allow a more deliberate process of considering alternative and supplemental regulatory provisions" and to provide "sufficient time for any additional rulemaking."
- The decision has already received blowback from advocacy organizations and hospital associations such as 340B Health and the American Hospital Association.
The 340B program has grown in size and seen more scrutiny since its creation in 1992. It has become the subject of some controversy since President Donald Trump took office, prompting a lawsuit between HHS and the hospital industry and recurrent Senate hearings on the program's vague intent, the lack of transparency surrounding its rules and the level of oversight by the Health Resources and Services Administration (HRSA).
The original intent of 340B was to lower the price of drugs for safety net hospitals, enabling providers to offer better care for low-income patients. But growth of the program since its implementation has created opacity and confusion around its purpose, fueled by a lack of specificity in guidance around hospital eligibility criteria.
Visibility into prices is one gap in clarity that remains unaddressed, and an HHS ruling on ceiling price and civil monetary penalties for manufacturers that overcharge eligible hospitals was much anticipated by the hospital industry. It's not the first time a decision has been delayed.
Tom Nickels, executive vice president at AHA, voiced the association's displeasure in another delay in a statement, emphasizing that the 340B program is "critical as ever" in providing healthcare to vulnerable populations.
"The 340B ceiling price and civil monetary penalties rule were intended to shine needed light on drug manufacturer price increases and hold drug manufacturers accountable for price overcharging. These reasons are why we continue to be disappointed in the delays — including five times since the beginning of last year alone — of the final rule and in the short shrift given to the review of the latest public comments," Nickels said. "The irony is not lost on us that drug manufacturers continue to lobby for increased reporting for hospitals and others while refusing any transparency on their part."
Part of the problem surrounding ceiling price is that providers don't know how much they should have to pay for certain drugs, or how much their competitors are paying. Delaying the decision for another year will "allow drug makers to continue to saddle hospitals, clinics and health systems with higher and higher prices," asserted 340B Health in a statement.
"HHS should begin enforcing these rules immediately," the statement reads. "The time for delay is over. It is time for action."
The pharmaceutical industry has so far welcomed the decision to delay the 340B rule. "PhRMA supports HHS putting revised, thoughtful regulations on ceiling price calculations and [civil monetary penalties] into effect as quickly as possible to ensure that rules on these topics are clear for both covered entities and manufacturers," Nicole Longo, a spokeswoman for the organization, told Healthcare Dive. "We urge HRSA to finalize smart ceiling price and CMP regulations that eliminate needless regulatory burdens and advance the goals of the 340B law."
Longo said PhRMA also supports HRSA's implementation of the 340B ceiling price database, which will provide pricing transparency for covered organizations, and has encouraged HRSA to "move expeditiously" to make the database operational.