On Dec 10, the Health Resources and Services Administration (HRSA) released a final rule establishing a process to resolve disputes between 340B-covered entities and drug manufacturers.
While the final rule establishes an administrative dispute resolution (ADR) panel, which will be empowered by the Health & Human Services Secretary to review claims and make precedential and binding agency decisions, its authority will be limited to claims disputes between manufacturers and 340B-covered entities. For example, the ADR panel will not have broad authority to review and intervene in the growing trend of manufacturer restrictions on 340B hospitals’ use of community pharmacies.
The final rule also establishes an ADR process as follows:
- First, a covered entity or manufacturer must file a written claim for ADR with HRSA within three years of the date of the alleged violation.
- If the written claim exceeds $25,000, then the ADR panel will have jurisdiction in the following situations:
- When a covered entity is overcharged, including claims where the manufacturer limits the ability to purchase at or below 340B ceiling price
- When the manufacturer claims a covered entity has illegally diverted 340B drugs to ineligible patients or resulted in Medicaid duplicate discounts after conducting an authorized audit.
The final rule also establishes required documentation for both covered entities and manufacturers, and the ability for the ADR panel to refer final decisions to HRSA for appropriate action, including refunds, penalties, removal or referral to the appropriate federal authorities.
The final rule was published today in the Federal Register and is effective Jan. 13, 2021.