HHS to delay 340B final rule until July 2018

The Department of Health and Human Services has again delayed the 340B final rule, which would penalize pharmaceutical companies that knowingly overcharge hospitals for drugs purchased through the program. This time the government is delaying it until July 2018.

In a proposed rule (PDF) posted Thursday morning on the Federal Register, HHS argues that the delay gives the agency more time to consider changes to the regulation and to look into potential objections raised about the rule.

“Requiring manufacturers to make targeted and potentially costly changes to pricing systems and business procedures in order to comply with a rule that is under further consideration and for which substantive questions have been raised would be disruptive,” the rule states.

HHS had already delayed the implementation of the rule multiple times this year, and its start date was also pushed back under the Trump administration’s widespread regulatory freeze.

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The final rule would allow HHS to issue fines of up to $5,000 to drugmakers that overcharge hospitals for medications under the 340B program. The rule also included methodology for drug companies to follow when estimating the ceiling cost of a new covered outpatient drug.

340B Health, an association that includes 1,300 hospitals across the country participating in the 340B drug program, said in a statement sent to FierceHealthcare that it planned to submit comments to oppose further delay of the final rule.

“There is no reasonable excuse for delaying this regulation any longer,” 340B CEO Ted Slafsky said. “Nor is there any good reason for reopening the matter for further rulemaking, as the administration proposes.”

HHS is also planning significant cuts to 340B program payments, per a proposed rule issued in July.

The agency has proposed paying hospitals 22.5% less than the average sales price for some drugs purchased under the 340B program, which requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations and covered entities at significantly reduced prices. At present, CMS pays up to 6% more than the average sales price in the 340B program, and the rate is a long-standing Medicare policy.