Health Reform WK-EDGE Drug ceiling prices calculation, CMPs may be delayed a year
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Friday, May 11, 2018

Drug ceiling prices calculation, CMPs may be delayed a year

By Sara Cracau, J.D.

HHS proposes to further delay the effective date of the Final rule which sets the calculation of 340B ceiling prices and the resulting application of civil monetary penalties (CMPs) for violations of the ceiling prices. HHS proposes delaying Final rule’s effective date from July 1, 2018, to July 1, 2019, to allow a more deliberate process of considering alternative and supplementary regulatory provisions and to permit sufficient time for further rulemaking (Proposed rule, 83 FR 20008, May 7, 2018).

HHS published a notice of proposed rulemaking (NPRM) in 2015 to implement civil monetary penalties for manufacturers knowingly and intentionally charging a covered entity in excess of the ceiling price for a covered outpatient drug. The NPRM was intended to clarify the requirement that manufacturers calculate the 340B ceiling price on a quarterly basis and to set forth the requirement that a manufacturer charge $.01 (penny pricing) for each unit of a drug when the ceiling price calculation equals zero.

After reviewing the initial comments, HHS reopened the comment period to solicit additional comments on the following areas of the NPRM: 340B penny pricing - ceiling price calculations that result in a ceiling price that equals zero; the methodology used by manufacturers when estimating the ceiling price for a new covered outpatient drug; and the definition of the "knowing and intentional" standard used when assessing a CMP for overcharging manufacturers (see 340B gets teeth with CMPs, January 5, 2017).

Effective date delay. HHS did not believe that the proposed delay in the effective date would adversely affect any of the stakeholders in a significant way. Other more significant remedies were available to entities that believed they were not provided the full discount that they were entitled to receive under the program. Furthermore, the proposed delay was anticipated to allow more full consideration of the substantial issues of fact, law, and policy identified during review of the rule. The proposed delay would also save the healthcare sector compliance costs.

No impact. As required by Executive Order 12866, HHS determined that the proposed delay would have an economic impact of $100 million or more and, therefore, this NPRM has not been designated as an "economically significant" proposed rule under section 3(f) (1) of the Executive Order 12866. HHS projected that the proposed rule would not have impact on the current reporting and recordkeeping burden on manufacturers under 340B Program.

FederalRegisterIssuances: ProposedRules NewsFeed 340BNews AgencyNews BiologicNews DrugNews MedicaidNews MedicarePartDNews PharmaServicesNews

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