On January 5, 2017, the HHS Health Resources and Services Administration (HRSA) published a final rule updating the price structure that drug manufacturers participating in the 340B Drug Pricing Program may charge to covered entities purchasing drugs under the Program. This rule becomes effective on March 6, 2017; however, HRSA has announced that it will begin enforcement of this rule on April 1, 2017 to coincide with the beginning of the next quarter for the 340B Program.
The final rule does not make significant substantive changes from the proposed ceiling price rule, which was published in June 2015, as reported here. HRSA finalized the requirements for manufacturers to calculate the ceiling price for covered outpatient drugs on a quarterly basis as the AMP (average manufacturer price) reported from the preceding calendar quarter minus the URA (unit rebate amount), and defined the methodology that manufacturers must use when estimating the ceiling price for a new covered outpatient drug based on the wholesale acquisition cost minus rebate percentage. HRSA limited the use of the estimated ceiling price for new drugs only until an AMP becomes available. HRSA also codified its current policy on “penny pricing” in this rule, which requires manufacturers to charge $0.01 when the calculation of the 340B ceiling price for a covered outpatient drug is zero.
In this rule, HRSA established a maximum $5,000 civil monetary penalty per instance for manufacturers that have “knowingly and intentionally” charged a covered entity more than the ceiling price for a covered outpatient drug. HRSA suggested that it expects CMPs to be applied infrequently, as it encourages manufacturers and covered entities to work together to resolve discrepancies within the 340B Program. While the final rule offers a number of examples of overcharging that HRSA would not consider to be “knowing and intentional,” HRSA has delegated the enforcement of this civil monetary penalties provision – including the definitions of intent – to the HHS Office of the Inspector General.
The final rule is available here, and a news alert from HRSA’s Office of Pharmacy Affairs is available here.
