March 30, 2018

HHS wants to delay the 340B overcharge rule. For the 5th time.

Daily Briefing

    HHS on Tuesday again sought to delay the effective date of a yet-to-be-released final rule that would penalize drugmakers that deliberately overcharge providers for drugs purchased under Medicare's 340B drug discount program.

    Background

    The federal 340B program requires drug manufacturers to provide outpatient drugs to eligible health care providers at discounts ranging from 20% to 50%. The program, created by Congress in 1992 and expanded under the Affordable Care Act, focuses on hospitals with disproportionately low-income patient populations. However, the program has come under scrutiny, with some questioning the amount of charity care participating hospitals are providing.

    The rule, which is pending review by the White House Office of Management and Budget (OMB), originally was scheduled to take effect Feb. 28, 2017, and the federal government was scheduled to begin enforcing it on April 1, 2017. However, HHS repeatedly has delayed the effective date after stakeholders said some of the rule's restrictions were too narrow. HHS in September 2017 delayed the rule.

    According to Politico's "Pulse," little is known about the rule, since it has not been made public. But CQ News in September 2017 reported the final rule would levy fines up to $5,000 against drugmakers that "knowingly and intentionally" overcharge providers for drugs purchased through the 340B program and would require drugmakers to offer refunds for overcharges on new drugs rather than requiring providers to request refunds, as is currently required.

    HHS requests further delay

    HHS for the fifth time has asked OMB to delay the rule's effective date, Modern Healthcare reports. The department's request did not specify a new effective date for the final rule, according to Modern Healthcare. An HHS spokesperson said the department does not comment on rules pending a review from OMB (Dickson, Modern Healthcare, 3/28; Diamond, "Pulse," Politico, 3/29; Siddons, CQ News, 9/28/17 [subscription required]).

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