HRSA Proposes to Delay Enforcement of Manufacturer Overcharge Penalty Rule Until July 1, 2018; Seeks Comment on Delay

By , Published On: August 18, 2017

HRSA is proposing to delay enforcement of its final rule imposing civil monetary penalties on manufacturers that overcharge 340B program covered entities (Overcharge CMP Rule) until July 1, 2018.[1]  The agency will solicit comments on the proposal for 30 days once it is formally published in the Federal Register on August 21, 2017.

If HRSA adopts the proposal, it will be the fourth time the Overcharge CMP Rule is delayed.  The rule, which Congress directed HRSA to develop within six months of passage of the Affordable Care Act back in 2010, was finalized on January 5, 2017.[2]  At that time, the rule was set to take effect on March 6, 2017.[3]  The Trump Administration imposed a regulatory freeze upon taking office, which delayed enforcement of the rule to March 21, 2017.[4]  On the eve of the March effective date, HHS and HRSA again delayed enforcement of the rule until May 22.[5]  On May 19, HRSA announced that it would delay the rule yet again, to October 1, to allow “regulated entities sufficient time to implement the requirements of the rule.”[6]

The latest delay comes as HRSA reportedly is nearing implantation of another Affordable Care Act requirement – that covered entities be given the means to verify the 340B ceiling price of drugs they purchase.[7]  Without the Overcharge CMP Rule, however, it is unclear how covered entities would be able to redress overcharges.  In 2003, the HHS Office of the Inspector General (OIG) found that such statutory violations are common, but to date covered entities have not had visibility in the 340B ceiling prices.[8]

If you would like to learn more, contact Jason Reddish, Michael Glomb, or the Feldesman Tucker attorney with whom you usually work.  Follow us on Twitter and Facebook for more updates.

[1] 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation, Preview Copy, at https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-17633.pdf.

[2] See Karan, Elizabeth J. and Glomb, Michael B., HHS Releases the Final 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation (Jan. 6, 2017), at https://www.feldesmantucker.com/hhs-releases-final-340b-drug-pricing-program-ceiling-price-manufacturer-civil-monetary-penalties-regulation/; see also 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation, 82 Fed. Reg. 1,210 (Jan. 5, 2017).

[3] 82 Fed. Reg. at 1,210

[4] 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation, 82 Fed. Reg. 12,508 (Mar. 6, 2017).

[5] 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation, 82 Fed. Reg. 14,332 (Mar. 20, 2017).

[6] 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation, 82 Fed. Reg. 22,893 (May 19, 2017).

[7] 42 U.S.C. § 256b(d)(1)(B)(iii).

[8] HHS OIG, Pharmaceutical Manufacturers Overcharged 340B-Covered Entities [sic], A-06-01-00060 (Mar. 10, 2003).