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HHS implements long-awaited 340B drug price transparency rule

The rule directs pharmaceutical manufacturers to disclose the maximum per unit ceiling price that can be charged to 340B hospitals.

Susan Morse, Senior Editor

The Department of Health and Human Services will implement the long-delayed final rule for enforcing 340B drug ceiling price transparency, on January 1, 2019.

The rule directs pharmaceutical manufacturers participating in the 340B drug pricing program to disclose the maximum per unit ceiling price that can be charged to 340B hospitals.

Enforcement will be maintained through a closed website available to 340B participating hospitals and providers. Federal regulators will post drug pricing information on the site.

The rule includes monetary penalties for drug companies that overcharge.

Stakeholders said there were numerous instances of drug companies overcharging hospitals, as backed by an Office of Inspector General report.

WHY THIS IS IMPORTANT

The decision ends five delays over eight years since Congress gave HHS the ability to enforce drug price ceilings.

HHS said the delays were made to conduct longer rulemaking.

Essential Hospitals said HHS's decision to finally implement the rule was the result of a lawsuit it and six other stakeholders, including the American Hospital Association, brought against the agency in September over the delay.

On Thursday, America's Essential Hospitals and 340B Health said they welcomed the decision.

THE TREND

The 340B program was created in 1992 and expanded under the Affordable Care Act to require drug manufacturers to provide outpatient drugs at a 20 to 50 percent discount to eligible hospitals that serve vulnerable populations.

Hospitals get reimbursed from the government at a higher price than what they're charged, using the difference to cover the cost of care for patients who don't have the ability to pay.

But some questioned whether 340B had become a cash cow for participating hospitals, claiming these providers prescribed more expensive drugs.

ON THE RECORD

"The final rule issued today by the Dept. of Health and Human Services and the Health Resources and Services Administration is a big step toward stopping drug companies from overcharging 340B hospitals, clinics, and health centers," said Maureen Testoni, interim president and CEO of 340B Health.

THEIR TAKE

Implementation of the rule is a much-needed measures to hold drug companies accountable for knowingly overcharging covered entities in the 340B program, said Dr. Bruce Siegel, president and CEO of America's Essential Hospitals.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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