HHS proposes nixing rule affecting insulin and EpiPen discounts for community health centers

A bottle of insulin surrounded by a stethescope
The Department of Health and Human Services is looking to rescind a Trump-era regulation that requires community health centers to offer insulin and EpiPens at the same price or below what they get under 340B. (Getty/Samara Heisz)

The Department of Health and Human Services (HHS) proposed rescinding a Trump-era rule that required community health centers to fully pass along discounts they received from the 340B drug program for insulin and EpiPens.

HHS said in a notice that the rule finalized by the Trump administration in December 2020 created too much of an administrative burden on community health centers. Back in March, the agency had delayed implementation of the rule until July.

The administrative burden created under the rule “would be significantly exacerbated by the multitude of demands on health centers related to the COVID-19 pandemic,” the proposed rule said.

The final rule, published in Dec. 2020 in the waning days of the Trump administration, required any community health center  participating in 340B to create new procedures to offer insulin and injectable epinephrine to low-income patients at or below the price purchased through the program.

340B requires drug companies to offer discounted products to safety net hospitals, community health centers and other providers in exchange for participation in Medicaid and Medicare.

RELATED: Judge halts 340B dispute rule, siding with Eli Lilly in lawsuit over program

But community health centers balked at the new requirements that came with the rule, especially during a pandemic that has already strained resources.

The National Association of Community Health Centers cheered HHS' new regulation nixing the Trump-era rule.

“This rule would not increase access for patients but would place an immense burden on the health center program,” the group said in a statement Tuesday. “Under the 340B program health centers are required to invest every penny of savings back into patient care and will continue to provide patients affordable medications.”

HHS said in the new proposed rule that the Trump-era regulation would have called on health centers to create and keep up new practices to determine whether a patient is eligible to get the drugs at or below the 340B discounted price. This would result in “reduced resources available to support critical services to their patients,” HHS said.

A health center that did not meet the Trump-era regulation would lose eligibility for key federal grants.

“Moreover, this rule will result in a loss of revenue from 340B savings for health centers participating in the 340B program and this loss, along with the increased administrative costs and administrative burden, will result in reduced resources being able to support services to health center patients,” the new HHS proposed rule said.

Former President Donald Trump called for the rule in an executive order in July 2020. It was part of a larger effort by the administration to tackle high insulin costs. The administration also created a voluntary payment model that launched in January where Medicare Advantage plans offered insulin to Part D beneficiaries for a maximum $35 co-pay for a month's supply.

The proposed rule is the latest victory for providers and 340B advocates.

The Health Resources and Services Administration wrote to six drugmakers last month demanding they resume giving discounted drugs to contract pharmacies, which are third-party entities that dispense 340B-discounted products on behalf of the covered entity.

Last summer, the drug companies started to restrict sales to contract pharmacies after questions over duplicative discounts and whether benefits reach the patients. Provider groups have responded that the moves will hurt their ability to deliver care to medically vulnerable populations and that the program is vital to help them as drug prices have risen.