HHS Will Delay 340B Final Rule Implementation to July 2018

On September 29, 2017, the Health Resources and Services Administration (“HRSA”) published, in the Federal Register, the Final Rule delaying the effective date regarding the methodology for calculating the 340B ceiling price (including the so-called penny pricing policy) and civil monetary penalties (“CMPs”) for knowing and intentional overcharges of 340B covered entities until July 1, 2018 (“Effective Date Final Rule”). The Final Rule that established the 340B ceiling price calculation methodology and CMPs was originally published on January 5, 2017 (“Substantive Final Rule”; see our original post regarding the Substantive Final Rule here) but subsequently encountered several delays (see our posts here, here, and here).

HRSA reiterated the points it made in the Notice of Proposed Rulemaking (“NPRM”) it published on August 21, 2017. After considering the comments it received to the NPRM, HRSA decided to finalize the delay to implementation of the Substantive Final Rule to July 1, 2018, as initially proposed. The agency stated that it “continue[d] to believe that the delay of the effective date provides regulated entities sufficient time to implement the requirements of the [Substantive Final Rule], as well as allowing a more deliberate process of considering alternative and supplementary regulatory provisions, and to allow sufficient time for additional rulemaking.” 82 Fed. Reg. 45512.

Similar to the NPRM, the Effective Date Final Rule provided no clarity as to what additional rulemaking would be forthcoming. Should HRSA advance “alternative and supplementary regulatory provisions” that would alter the rulemaking described in the Substantive Final Rule, an additional notice and comment period would be required. Therefore, it is unclear whether the 340B Substantive Final Rule will be implemented as finalized in January or whether a July 1, 2018 date for implementation of a 340B final rule can be relied upon, despite HRSA’s statement that a further delay does not appear necessary. What we do know is that entities participating in the 340B program would do well to carefully consider their timelines for implementation of new systems and processes designed to comply with the Substantive Final Rule.

We will continue to track and report on further developments regarding implementation of the Substantive Final Rule or other updates concerning the 340B Drug Pricing Program.