HHS finalizes 340B ceiling-price rule delay

HHS on Friday finalized its decision to postpone a rule setting new ceiling prices for the 340B drug discount program, setting the stage for the agency to develop a new policy.

Although HHS was slated to set 340B ceiling prices starting July 1, it delayed implementation until July 2019. This is the fifth time the rule has been postponed, according to a notice issued Friday.

HHS said it needs more time to consider additional rulemaking that will replace this one.

The 340B rule was initially proposed under the Obama administration, but HHS recently said it is unclear whether the regulation would be upheld in court.

"It would be disruptive to require stakeholders to make potentially costly changes to pricing systems and business procedures to comply with a rule that is under further consideration and for which substantive questions have been raised," HHS said in the rule.

In addition to setting new drug ceiling prices, the rule would allow HHS to levy fines against drug manufacturers that intentionally charge a hospital more than the ceiling price.

Michael Rodgers, senior vice president at the Catholic Health Association, had urged the CMS not to delay the rule because 340B hospitals "do not have an effective means to challenge manufacturers they suspect of overcharging."

HHS said it can protect hospitals from rising drug prices through audits it regularly performs to investigate overcharging allegations.

But that hasn't assuaged hospitals' concerns. "The 340B ceiling price and civil monetary penalties rule were intended to shine needed light on drug manufacturer price increases and hold drug manufacturers accountable for price overcharging," Tom Nickels, executive vice president of the American Hospital Association, said in a statement.

"Today's decision by the Trump administration to delay enforcement of a rule penalizing pharmaceutical companies that overcharge providers in the 340B drug pricing program will allow drugmakers to continue to saddle hospitals, clinics and health systems with higher and higher prices," added 340B Health, an association of more than 1,300 hospitals.