Election Results May Have Caused HHS to Withdraw Controversial Drug Discount Rule, Attorney Says


The Department of Health and Human Services has pulled a controversial proposed rule on drug discounts for safety-net providers such as hospitals, which was under review at the White House, according to Bloomberg BNA’s Bronwyn Mixter.

Martin Kramer, director of communications at the HHS Health Resources and Services Administration said the agency in 2015 “plans to issue a proposed guidance for notice and comment that will address key policy issues raised by various stakeholders committed to the integrity of the 340B program. HRSA is also planning to issue proposed regulations where the statute provides explicit rulemaking authority, pertaining to civil monetary penalties for manufacturers, calculation of the 340B ceiling price, and administrative dispute resolution.”

The 340B program requires drug manufacturers to provide discounts or rebates to certain hospitals that serve a disproportionate share of low-income patients. Pharmaceutical companies and safety net providers have been at odds over the rule. Hospitals have argued the program helps them better serve vulnerable patients. But drug makers say HRSA’s interpretation of the 340B orphan drug exemption, enacted as part of the Affordable Care Act, significantly expanded the type of entities that can access previous 340 discounts for prescription drugs.

The decision to withdraw the regulation wasn't surprising and may have been partially motivated by the recent election, an attorney told Bloomberg BNA Nov. 14.

Attorney Donna Lee Yesner of Morgan, Lewis & Bockius LLP in Washington said the election may “partially explain” the decision because issuing the proposed rule might have triggered “unwanted oversight from the Republican-controlled Congress.”

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