by Admin | February 9, 2016 2:53 pm
February 9, 2016—The Obama administration today asked Congress in its fiscal year 2017 budget request to amend the 340B statute to give the Secretary of Health and Human Services express authority to “issue regulations with binding and future effect” for the drug discount program.
The administration is seeking $26.24 million for the 340B program – $17.24 million in discretionary funds plus $9 million from a proposed 0.1 percent fee on 340B drug purchases. The President sought $24.73 million for the 340B program in his fiscal 2016 budget request, of which $7.5 million would have come from the user fee. Congress passed an omnibus spending bill in December[1] that kept the 340B program level-funded at $10.24 million. The President has proposed a 340B user fee in his past six budgets.
HHS’s power to regulate the 340B program was reined in by a federal district judge in 2014[2]. The judge ruled that Congress specifically authorized 340B program rulemaking in only three places: (1) the establishment of an administrative dispute resolution process, (2) the “regulatory issuance” of precisely defined standards of methodology for calculation of ceiling prices, and (3) the imposition of monetary civil sanctions.
In its breakdown for congressional appropriators[3] of the administration’s budget request, the Health Resources and Services Administration said new rulemaking authority for 340B is being sought “to ensure adherence to the 340B program’s principles, compliance with the law, and the most effective use of this critical safety-net program.”
Apart from the three areas noted by the federal district court, “HRSA lacks explicit regulatory authority for all other provisions in the statute, including for example, the definition of a patient, the utilization of contract pharmacies, and hospital charity care requirements,” HRSA said in the budget justification document. It continued:
“Clear legislative authority to conduct rulemaking for all provisions in the 340B statute would be most effective in facilitating HRSA’s oversight over, and management of, the 340B Program. In addition, regulatory authority would allow HRSA to provide greater clarity and specificity for its program requirements which would enable us to respond to some key [Government Accountability Office] findings, such as clarifying hospital eligibility requirements and the definition of a 340B patient…. Because regulations are binding and enforceable, regulations would allow HRSA to be more specific about 340B Program requirements and provide necessary clarity for stakeholders.”
Elsewhere in the budget justification to Congress, HRSA says it expects during this calendar year to implement a congressionally mandated system whereby covered entities can access 340B ceiling price information via a secure website. It also says the following activities are either underway or planned as priorities for the current or upcoming fiscal years:
HRSA also said it is reviewing comments on and determining next steps both for its proposed 340B program omnibus guidance and its proposed regulation to administer a system of financial sanctions on drugmakers that overcharge 340B providers knowingly and intentionally. The agency said it anticipates issuing a proposed notice of rulemaking this calendar year to create a 340B administrative dispute resolution process.
Source URL: https://340binformed.org/2016/02/president-seeks-express-rulemaking-power-for-340b-program/
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