On November 30, 2018, the Department of Health and Human Services (HHS) issued a final rule that puts in effect January 1, 2019, rather than July 1, 2019 as previously announced significant changes to the 340B program including a ceiling price on how much drug manufactures can charge hospitals who participate in the drug pricing program and allow Health Resources and Services Administration (HRSA) to impose civil money penalties for drug companies that overcharge hospitals.

The November rule implements a ceiling price calculation and civil money penalties first announced in a January 2017 final rule. HHS moved up the start date six months after five delays, hundreds of public comments and litigation from hospital groups charging that HHS’s delayed implementation was unlawful.

Some key changes to the 340B program coming January 1st in addition to the ceiling price calculation include:

  • A requirement that manufacturers to offer refunds for overcharges on new drugs instead of having covered entities request refunds, as is done under the current rule;
  • A grant of authority to HRSA levy civil money penalties up to $5,000 for manufactures who knowingly or intentionally charge hospitals above the ceiling price.

While November’s final rule brings an end to one story with the 340B program, Congress is likely to continue its oversight of the program in 2019.

Posted by Vince Sampson