Providers, drugmakers at odds over delaying 340B pricing rule

Safety-net hospitals urged HHS not to postpone a rule setting new drug ceiling prices for the 340B discount program, saying the delay would leave them defenseless against rising costs.

Although HHS was supposed to set ceiling prices starting July 1, the department wants to hold off on the rule for a year.

If it does so, this will mark the fifth time the rule has been postponed.

Failing to set drug ceiling prices means that 340B hospitals “do not have an effective means to challenge manufacturers they suspect of overcharging,” Michael Rodgers, senior vice president at the Catholic Health Association, wrote in a comment letter to HHS.

Prescription drug prices rose 24.9% overall between 2012 and 2016, according to the Health Care Cost Institute.

“Within the context of the 340B program, covered entities are blind to overcharges by drug manufacturers and have no means of accessing ceiling price information,” Dr. Bruce Siegel, president of America’s Essential Hospitals, said in a comment letter.

HHS wants to postpone the rule, which was proposed under the Obama administration, because it is unclear whether the regulation as outlined is legal.

“Requiring manufacturers to make targeted and potentially costly changes to pricing systems and business proce- dures to comply with a rule that is under further consideration would be disruptive,” HHS said in the rulemaking.

Drugmakers support the delay, agreeing that the Trump administration should not finalize the rule if there are legal concerns. GlaxoSmithKline and others in the industry have also said the rule in its current form is vague and overly burdensome.

For instance, the proposed rule calls for HHS to impose civil money penalties against manufacturers if they don’t comply with the ceilings, but it doesn’t provide clear standards for imposing these penalties, according to John Boone, vice president of contract management and operations at GlaxoSmithKline.

“This omission contravenes the 340B law, which expressly authorizes CMPs only if concrete regulatory standards for imposing them are first established, and it would unfairly heighten risk for manufacturers that participate in 340B,” Boone said in a comment letter.