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HRSA Issues Fifth Delay to Final Rule on 340B

News  |  By Jack O'Brien  
   May 04, 2018

The Trump administration has once again delayed the implementation of new accountability measures for the program which disburses Medicare payments to DSH hospitals.

The Health Resources and Services Administration (HRSA) announced Friday it would delay the implementation of a final rule on the 340B Drug Pricing Program until July 2019, the fifth delay for the federal program. 

The final rule, officially published in the Federal Register in January 2017, imposes monetary penalties for manufacturers that "knowingly and intentionally" charge more than ceiling price for an outpatient drug, clarify the requirement to calculate that price every quarter, and require penny pricing for each unit of a drug when the ceiling price is zero.

The 340B program disburses Medicare payments to qualified disproportionate share hospitals (DSH) for the cost of outpatient drug purchases. The program has been the subject of criticism in recent years for lack of oversight, rampant abuse, and profiteering, according to a private study and a recent congressional report.

Report: 340B Drug Program Rife with Abuse, Profiteering

Advocates for the program reacted after HRSA announced its decision to again delay enactment of the rule. 

"There is a clear history of manufacturers overcharging 340B providers. Delaying enforcement of this rule will have a tremendous adverse impact on hospitals, clinics and health systems caring for low-income and rural patients," Maureen Testoni, interim CEO of 340B Health, said in a statement to HealthLeaders Media. "It has been eight years since Congress directed HHS to establish these vital consumer protections and they are long overdue. We are calling on the administration to enforce the law as written and make sure manufacturers aren't overcharging for their products."

America's Essential Hospitals (AEH) said the proposed measures are long overdue to institute additional accountability for stakeholders in the 340B program. While hospitals and other medical facilities have complied with more than 800 federal audits since 2012, according to AEH, manufacturers have faced only 11 audits since 2015. 

"We find entirely unacceptable today’s decision by HRSA to put off for more than a year rules to protect patients and hospitals from drug company overcharges," AEH said in a statement to HealthLeaders Media. "Federal scrutiny of manufacturer pricing practices has found overcharges in the 340B Drug Pricing Program. These overcharges undermine the program’s ability to make drugs affordable for vulnerable patients and increase costs for their hospitals, which already operate with thin margins."

"We need to level the playing field, and these rules on ceiling prices and civil monetary penalties are a reasonable first step toward that goal. We call on HRSA to revisit its decision and put these rules in place immediately."

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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