HHS to delay drug pricing rule to July 2019

The Health Resources and Services Administration (HRSA), a sub-agency of the US Department of Health and Human Services (HHS), is delaying a rule establishing ceiling prices on outpatient drugs under the 340B Drug Pricing Program and fines for violating manufacturers after finding it needs more time to reconsider certain details and that companies need time to adjust, according to a filing in the Federal Register.

The Substantive Final Rule, which was originally published on January 5, 2017, established 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. After repeated delays, Friday’s final rule further delays the effective date until July 1, 2019, noted David Gibbons and Alan Kirschenbaum on Hyman, Phelps & McNamara’s FDA Law Blog.

The HRSA reiterated the points it has made previously regarding its rationale for delayed implementation. The agency stated that it continues to believe that a delay of the effective date is necessary to provide regulated entities with additional time to implement the requirements of the Substantive Final Rule, and also to provide “a more deliberate process” for HRSA to consider “alternative and supplemental regulatory provisions.”

Thus, implementation of the penny pricing policy and CMPs would be “counterproductive” prior to the issuance of additional or alternative rulemaking. A new point raised in this Effective Date Final Rule is that the HHS’ efforts to address prescription drug pricing in government programs broadly provides another reason to delay implementation of the Substantive Final Rule.