The 340B Federal Drug Pricing Program (the 340B Program) requires pharmaceutical manufacturers to offer drugs at discounted prices to eligible hospitals, clinics and other entities for use in the outpatient setting. The 340B Program was created by the Veterans Health Care Act of 1992 (codified at Section 340B of the Public Health Services Act) and is administered by the Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA), Office of Pharmacy Affairs (OPA). In recent years, attention to, and scrutiny of, the 340B Program has increased significantly, due in part to an expansion in the number of participating entities as a result of the Patient Protection and Affordable Care Act of 2010.
To participate in the 340B Program, entities must maintain full compliance with 340B Program requirements. Compliance with 340B Program requirements can be challenging, because guidance from OPA on a variety of significant topics has been unclear and subject to a range of interpretations, even in relation to fundamental questions of who may purchase and receive 340B drugs.
In 2014, OPA intended to release a 340B “Mega-Reg”, a formal notice-and-comment rule intended to cover a broad swath of important compliance topics, including entity and patient eligibility. Prior to the issuance of the Mega-Reg, however, a United States federal district court, responding to litigation brought by the pharmaceutical manufacturers challenging the government’s rulemaking authority in a related matter, issued a decision that called into question OPA’s authority to issue regulations on such topics. (For further discussion of the case, see: Federal Court Vacates 340B Rule Regarding Orphan Drugs). OPA has since withdrawn the Mega-Reg and indicated that it will instead seek to issue omnibus guidance in 2015. As of May 2015, this guidance is under review at the Office of Management and Budget.
In light of increasing participation in the 340B Program and continued concerns regarding the lack of oversight and clarity regarding compliance with 340B Program requirements, the House Energy and Commerce Health Subcommittee (the Subcommittee) held a hearing pertaining to the 340B Program on March 24, 2015. While the hearing focused upon increased oversight and transparency in the 340B Program, the Subcommittee appeared open to revisiting the 340B statute to provide increased clarity and federal oversight of the 340B Program.
The recently released draft legislation would have made both cosmetic and material changes to the 340B Program, including, but not limited to
- Renaming the 340B Program
- Formally stating the purpose of the 340B Program
- Refining the definition of a “patient” eligible to receive 340B drugs
- Enhancing participating entities’ data reporting requirements
- Assessing a user fee on 340B purchases
- Providing HHS with the authority to promulgate regulations governing many aspects of the 340B Program.
A section-by-section summary of the sections of the proposed legislation, with a focus on those provisions most relevant to health care providers participating in the 340B Program, follows below.
Summary of the Proposed Legislation
Click here to view the table.