HRSA: No Further Delay of 340B Ceiling Price and Civil Monetary Penalties Rule

By Alan M. Kirschenbaum

On November 6, we reported that the Health Resources and Services Administration of the Department of Health and Human Services (HHS) had proposed to move up the effective date of its 340B program ceiling price and civil monetary penalties regulation from July 1 to January 1, 2019. After reviewing comments on the proposal, many of which were critical of the acceleration, HHS has stuck to its guns, finalizing the January 1 date today.

HHS has subjected manufacturers to regulatory whiplash. After delaying the effective date of this January 5, 2017 rule five times over the past two years for vague reasons, the department is suddenly in a rush to make it effective – possibly prompted by a lawsuit brought by hospitals and hospital associations. January 1 is only 33 days away. Some manufacturers asked for a delay of two quarters because the abrupt acceleration of the effective date makes it difficult for companies – especially smaller ones – to upgrade their operational systems in time for January 1 compliance. Others commented that HRSA itself is not ready – the agency has not yet operationalized its on-line reporting system so that manufacturers will be able to report 340B ceiling prices, as required by the regulation, by January 1. To the first point, HHS responded that the two-year period since the rule was finalized has given stakeholders sufficient time to adjust their systems. To the second, HHS notes that it “plans to release the 340B ceiling pricing reporting system shortly and HHS will communicate further information through its website.”