340B will go through big transition in 2016

The 340B discount drug program is expected to have one of its biggest transition periods ever in 2016, argues an opinion piece in Lexology.

The final mega-guidance for the program will be issued next year, along with monetary penalties against drug manufacturers that overcharge hospitals, write Elizabeth S. Elson and Anil Shankar, healthcare attorneys with the firm Foley & Lardner. The Health Resources Services Administration (HRSA), which oversees the 340B program, also plans to issue guidelines for an alternative dispute resolution process for both participating hospitals and drug manufacturers.

Perhaps the biggest challenge to the 340B program is the question of whether HRSA will actually have the legal authority to administer it in the future. Elson and Shanker noted that the agency received more than "800 comment submissions (on the mega-guidance), many of which raised significant legal and operational concerns related to HRSA's proposal. In addition to these comments, HRSA must also consider the impact of a recent federal court decision, which vacated HRSA's orphan drug rule, calling into question HRSA's rulemaking authority."

HRSA lost a case in federal court brought by the pharmaceutical agencies after the agency had ruled that the only exclusion for orphan drugs offered through the 340B discount should be for the off-label use, lifting restrictions against rural and specialty cancer hospital participants.

The mega-guidance is HRSA's attempt to regulate some of the controversies that are associated with the 340B program, including the reselling of the steeply discounted drugs that hospital can purchase, as well as consistent record-keeping by the program participants.

Some hospitals participating in the 340B program have also been criticized for relatively low levels of charity care spending for low-income patients.

To learn more:
- read the Lexology article