HHS delays 340B drug price ceilings and penalties for the fifth time

Woman paying for a prescription at a pharmacy
HHS is delaying, for the fifth time, regulations that would set drug price ceilings under the 340B drug discount program, and hospitals are not happy. (Getty/Tom Merton)

The Trump administration is once again delaying regulations that would set price ceilings under the 340B drug discount program despite repeated pleas from hospital groups to implement new rules.

The Department of Health and Human Services (HHS) announced on Friday it will delay until July 2019 regulations that would set a ceiling price and impose civil penalties on drug companies that knowingly charge 340B hospitals above that limit. 

The rule (PDF), submitted for public inspection on Friday, is scheduled to be published on Monday, less than 30 days before it takes effect, a violation of federal requirements. The agency said it found "good cause" for the exception since the previous delay would expire before the new one takes effect. 

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The delay is the fifth for the rule, with HHS most recently delaying implementation from Jan. 1, 2018 to July 1.  

"HHS continues to believe that the delay of the effective date will provide regulated entities with needed time to implement the requirements of the rule, as well as allowing a more deliberate process of considering alternative and supplemental regulatory provisions, and to allow for sufficient time for any additional rulemaking," the agency said.

During the May comment period, hospital groups pleaded for the agency to finally implement the price caps in order to prevent drug manufacturers from overcharging vulnerable low-income 340B hospitals. Watchdog groups have said the program is plagued by a lack of transparency

RELATED: Hospital groups urge HRSA to institute 340B final rule

After the one-year delay was announced, hospital groups were quick to respond.

"Manufacturer overcharges in the 340B program jeopardize access to affordable drugs for vulnerable patients and drive up costs for hospitals with already limited resources," America's Essential Hospitals, which represents safety-net hospitals, said in a statement. "Given President Trump’s commitment to lowering skyrocketing drug prices, it only makes sense to implement this rule immediately." 

Tom Nickels, executive vice president of the American Hospital Association, said "skyrocketing prescription drug price increases" have made the 340B program critical for hospitals treating vulnerable patients.

"The 340B ceiling price and civil monetary penalties rule were intended to shine needed light on drug manufacturer price increases and hold drug manufacturers accountable for price overcharging," he said in a statement. "The irony is not lost on us that drug manufacturers continue to lobby for increased reporting for hospitals and others while refusing any transparency on their part."

Mary Mullaney, director of hospital payment policies at the Association of American Medical Colleges, told FierceHealthcare that the HHS Office of Inspector General has documented instances of drugmakers overcharging hospitals.

"Without this rule, hospitals still have no way of verifying they are being charged the correct amount for these drugs," she said. "This rule has gone through several notice and comment periods and is a straightforward solution to holding drug manufacturers accountable."

The delay comes weeks after President Trump unveiled a long-promised blueprint to lower drug prices.

HHS added that it "does not believe this delay will adversely affect any of the stakeholders in a meaningful way."