340B Rule Sinks Deeper Into Regulatory Freeze

March 21, 2017By David C. Gibbons & Alan M. Kirschenbaum

A final regulation implementing the 340B Drug Discount Program has been caught in the regulatory freeze. In the waning days of the Obama Administration, the Health Resources and Services Administration (“HRSA”) of HHS issued a final regulation describing the methodology for calculating the 340B ceiling price (including so-called penny pricing) and to establish civil monetary penalties for knowing and intentional overcharges of 340B covered entities.  We posted on that regulation here. It originally had a March 6, 2017 effective date, but the preamble stated that enforcement was not to begin until the beginning of the second quarter – i.e., April 1, 2017.

Pursuant to the new administration’s regulatory freeze (see our previous post here), HRSA postponed the effective date until March 21, 2017, but that postponement did not affect the April 1 enforcement date.  However, yesterday, HRSA issued an interim final rule further postponing the effective date until May 22, 2017, and inviting comment on whether the effective date should be even further delayed until October 1, 2017. Comments must be submitted by April 19, 2017.  HRSA explained that the additional delay was necessary to consider questions of fact, law, and policy raised in the rule, consistent with the regulatory freeze memorandum, and to provide regulated entities more time to implement changes necessary to comply with the Final Rule.

Categories: Health Care