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Analysis

HHS Hastens Changes to Drug Pricing Program Amid Hospitals' Legal Challenge

By Steven Porter  
   October 31, 2018

After repeatedly delaying implementation of the 340B rule, the Trump administration is proposing to accelerate the timeline by six months.

Rather than defend its decision to delay regulatory changes to the 340B Drug Pricing Program that were finalized in the final weeks of the Obama administration, the Trump administration is proposing to accelerate implementation of those changes by six months.

In a notice of proposed rulemaking released Wednesday, Health and Human Services said it aims to move the effective date up from July 1, 2019, to January 1, 2019. This comes after HHS said last year that it needed additional time to develop new policies affecting drug prices, and it marks a win for the hospitals and groups suing to end the delay.

"We are encouraged that, in response to our lawsuit, the government has proposed to begin enforcing rules demanding transparency and accountability for pharmaceutical manufacturers participating in 340B," Maureen Testoni, interim president and CEO of 340B Health, said in a statement.

Healthcare providers will see significant benefits if enforcement of the changes begins on New Year's Day, Testoni said.

"This would protect 340B providers from overcharges that sap them of their ability to care for patients in need," she said. "Now HHS must ensure that date does not slip."

American Hospitals Association General Counsel Melinda Hatton similarly said her organization is pleased by HHS' decision.

"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 released to HealthLeaders.

"The rule also requires that HHS make pricing information available online to 340B hospitals and other providers," Hatton added. "We strongly encourage HHS to publish that website promptly, which is critical to enforcement of the 340B program, as soon as possible after January 1."

Attorneys for HHS have asked a federal judge to place the hospitals' legal challenge on hold in light of the proposal; otherwise, the government has a November 13 deadline to respond to the complaint.

In addition to AHA and 340B Health, the plaintiffs in the lawsuit were America's Essential Hospitals, the Association of American Medical Colleges, and three individual hospitals: Rutland Regional Medical Center in Vermont, Genesis HealthCare System in Ohio, and Kearny County Hospital in Kansas.

Steven Porter is editor at HealthLeaders.


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