Health Reform WK-EDGE HHS moves up effective date of 340B ceiling price, civil monetary regulations
Wednesday, December 12, 2018

HHS moves up effective date of 340B ceiling price, civil monetary regulations

By Sheryl Allenson, J.D.

After publishing a final rule in January 5, 2017 that set forth the calculation of ceiling price and application of civil monetary rules for section 340B of the Health Resources and Services Administration’s Public Health Services Act (PHSA), HHS issued a proposed rule on November 2, 2018 soliciting comments to change the effective date of the January 5, 2017 rule from July 1, 2019 to January 1, 2019. This proposed rule was made final, moving the effective date of the January 5, 2017, proposed rule to January 1, 2019 (Final rule, 83 FR 61563, November 30, 2018).

Many comments were elicited from the November 2, 2018 proposed rule. According to the final rule, HHS proposed the effective date be moved to the earlier date because the January 5, 2017 final rule was subject to extensive comment. Moreover, HHS said it had considered the full range of substantive comments and that there had been numerous delays. HHS reviewed and either rebutted or adopted many comments in support of moving the final rule effective date to January 1, 2019.

Initially, HHS published a notice of proposed rulemaking (NPRM) in June 2015 that would, among other things, implement civil monetary penalties for manufacturers "who knowingly and intentionally" charged a covered entity more than the ceiling price for a covered outpatient drug. The 2015 NPRM also shed light on how the ceiling price is to be calculated and established that a manufacturer is required to charge a penny ("penny pricing policy") when the ceiling price calculation equals zero.

After the comment period closed and HHS received numerous comments, the agency reopened the period for public comment on certain specific areas of the NPRM. HHS received more than 70 comments during this period. Thereafter, HHS published a final rule on January 5, 2017, which considered the comments from both the NPRM and the second comment period. Initially that rule was to be effective in March 2017, however, it was delayed. The November 2, 2018 rule was put into place to cease any further delay in implementation, HHS prepared an analysis and responses to public comments. Some pushed for the effective date to be moved up to January 1, 2019, while others "urged HHS not to change the effective date." The agency indicated it only considered public comments dealing with the issue of moving up the effective date and did not address comments that were outside of that category. In its analysis, HHS summarized relevant comments before issuing a response.

In the notice, HHS also described the regulatory impact analysis for the final rule. In this instance, HHS said that the November 2, 2018, final rule was not designated as an "economically significant" final rule under section 3(f)(1) of Executive Order 12866. Moreover, the agency noted that when the 2017 rule was finalized, it also was designated as not "economically significant." By definition, then, moving the effective date of that rule would not likely have an economically significant impact.

FederalRegisterIssuances: FinalRules DrugNews MedicaidNews NewsFeed

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More
Health Reform WK-EDGE

Health Reform WK-EDGE: Breaking legal news at your fingertips

Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on health reform legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.

Free Trial Learn More