HHS sued over delay in drug pricing transparency regulations

The American Hospital Association and six other health organizations have sued HHS for delaying the implementation of rules that would force drug companies to be open about their pricing and punish them for overcharging participants in a federal drug discount program.

Six things to know:

1. The 340B drug pricing program, enacted nearly three decades ago, enables hospitals and other organizations that treat a large number of low-income and uninsured patients to buy certain outpatient drugs from drugmakers at a discount.

2. In 2010, Congress required HHS to implement program regulations to "cure some problems the program had faced, including the lack of transparency in ceiling prices, and the lack of robust enforcement mechanisms to ensure drug company compliance," according to the lawsuit filed Sept. 11 in Washington, D.C.

In January 2017, HHS issued a final rule for the 340B drug discount program regulations which were slated to take effect March 6, 2017. However, implementation has been delayed repeatedly. According to the lawsuit, the most recent delay was June 5, when HHS delayed implementation until July 1, 2019.

3. HHS decided to delay the effective date again after receiving various comments supporting and opposing such a move.

"HHS continues to believe that the delay of the effective date will provide regulated entities with needed time to implement the requirements of the rule, as well as allowing a more deliberate process of considering alternative and supplemental regulatory provisions, and to allow for sufficient time for any additional rulemaking," the agency wrote in the federal register. "HHS intends to engage in additional or alternative rulemaking on these issues and believes it would be counterproductive to effectuate the final rule prior to issuance of additional or alternative rulemaking on these issues."

"HHS is developing new comprehensive policies to address the rising costs of prescription drugs. These policies will address drug pricing in government programs, such as Medicare Parts B and D, Medicaid, and the 340B program. Due to the development of these comprehensive policies, we are delaying the effective date of the Jan. 5, 2017, final rule," the agency said.

4. Four national healthcare groups — the AHA, the Association of American Medical Colleges, America's Essential Hospitals, and 340B Health — now urge the court to deem the most recent delay unlawful and seek an order for HHS to implement the 340B drug pricing program regulations in 30 days.

They said they want to see implementation of regulations requiring drug companies to disclose maximum per-unit prices that can be charged to hospitals under the 340B drug discount program for outpatient drugs. They have also asked to see implementation of regulations that would allow the federal government to penalize drug companies for "knowingly and intentionally" overcharging 340B drug discount program providers.

5. Rick Pollack, president and CEO of the AHA, said: "As prescription drug prices continue to skyrocket, the 340B program is as crucial as ever in helping hospitals and health systems provide access to healthcare services for vulnerable patients and communities. Our lawsuit will ensure that drug companies provide the transparency and accuracy that the government has found lacking."

6. In addition to the four national healthcare organizations, Rutland (Vt.) Regional Medical Center; Genesis HealthCare System in Zanesville, Ohio; and Kearny County Hospital in Lakin, Kan., are also plaintiffs in the case.


More articles on legal and regulatory issues:
7 Ex-Advocate employees get $10M+ in suit over physician attack, secret recordings
Former Texas hospital nurse accused of harming patients indicted on capital murder
Hospitals refile lawsuit against CMS over $1.6B in 340B cuts



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