340B Drug Pricing Program: Obama Administration Issues Much Awaited Final Rule

  • By: Staff Editor
  • Date: January 11, 2017
  • Source:
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340B Drug Pricing Program: Obama Administration Issues Much Awaited Final Rule

The Health Resources and Services Administration (HRSA) within HHS has lately issued a final rule that imposes civil monetary penalties on drug manufacturers for overcharging hospitals and clinics covered under 340B drug discount program. The HHS initially proposed the rule in June 2015, opened for comment and then extended the comment period.

The final rule offers the calculation of the 340B ceiling price on a quarterly basis. It also provides a description on how civil penalties would be enforced on drug makers that knowingly and purposely overcharges a covered entity.

The rule will be enforced by the HHS beginning April 1, 2017.

340B Drug Pricing Program Background

The section 340B of the Public Health Service Act (PHSA), widely known as 340B Drug Pricing Program, was first issued by Congress in 1992 and then expanded via the Affordable Care Act (ACA) or Obamacare. The Office of Pharmacy Affairs (OPA) within the Health Resources and Services Administration (HRSA) of HHS administers the program.

The 340B section requires drug makers to sign an agreement, called a pharmaceutical pricing agreement (PPA), with the HHS. Under the PPA, a pharmaceutical company agrees to provide reductions on specified outpatient drugs purchased by covered entities.

Possible impact of the Trump Administration on Final Rule

The final rule is expected to be effective from April 1, 2017. There might be a delay in the effective date of this rule if the President-Elect Trump decides to review the rule and then modify or even repel it.

Related Training:

Pharmaceutical Government Price Reporting: Impact of Obamacare

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