Proposed FDA Rule 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation

What’s New/Significant

In January 2017, the Health Resources and Services Administration, Department of Health and Human Services (HHS), published a final rule titled "340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation" (the Rule). The Rule proposed was intended (i) to implement civil monetary penalties (CMP) for manufacturers that knowingly and intentionally charge a covered entity more than the ceiling price for a covered outpatient drug; (ii) to provide clarity on the requirement that manufacturers calculate the 340B ceiling price on a quarterly basis; and (iii) to establish the requirement that a manufacturer charge one cent (penny pricing policy) for drugs with a calculation that equals zero (80 FR 34583 [June 17, 2015]).

The effective date of the Rule was delayed until July 1, 2019, to allow a more deliberative process to consider alternative and supplemental regulatory provisions and to allow sufficient time for additional rulemaking.

This notice of proposed rulemaking ends any further delay of the Rule and changes its effective date from July 1, 2019, to January 1, 2019.

Rationale

HHS believes a delay in the effective date of the Rule is no longer necessary.

Scope

The Rule includes:

• The requirement that a manufacturer calculate the 340B ceiling price on a quarterly basis;
• The requirement that a manufacturer charge one cent per unit of measure if the 340B ceiling price calculation results in a ceiling price that equals zero (penny pricing);
• The methodology manufacturers must use when estimating the ceiling price for a new covered outpatient drug;
• An explanation of how a CMP would be imposed on a manufacturer that knowingly and intentionally overcharges a covered entity; and
• An explanation of what would constitute an instance of overcharging to trigger a CMP.

Enforcement

The Rule delegates to the Office of Inspector General the authority to handle CMP actions, and CMPs will be imposed pursuant to procedures contained in 42 CFR Part 1003.

Public Comments Sought w/in 60 days

What is the impact of (i) ceasing any further delay of the January 5, 2017, final rule, including any potential disruptions to implementation, and (ii) changing the effective date from July 1, 2019, to January 1, 2019?

Regulatory Impact

The Rule will affect the operations of manufacturers. HHS seeks public comment on accelerating the effective date of the Rule.