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  • Washington Highlights

    HRSA Finalizes Revised 340B Administrative Dispute Resolution Process


    Shahid Zaman, Director, Hospital Payment Policy
    For Media Inquiries

    The Health Resources and Services Administration (HRSA) on April 18 issued a final rule establishing a revised 340B Drug Pricing Program administrative dispute resolution (ADR) process. HRSA had proposed an ADR process proposed rule in late 2022 [refer to Washington Highlights, Dec. 2, 2022] that sought to revise the process to be less formal than the one previously finalized in 2020. The new rule finalizes a mechanism for 340B-covered entities and drug manufacturers to bring claims before a 340B ADR Panel consisting of experts within the HRSA Office of Pharmacy Affairs (OPA). Covered entities will be able to file claims related to manufacturers overcharging for covered outpatient drugs, while manufacturers can file claims related to covered entity violations of the statutory prohibitions on duplicate discounts and diversion.  

    Notably, in a favorable change from the proposed rule, the final rule will allow the ADR Panel to review claims on issues similar to those pending before a federal court. The final rule also clarifies that covered entities can bring an overcharge claim when a manufacturer has limited the covered entity’s ability to purchase a covered outpatient drug at or below the ceiling price. The new finalized process also: 

    • Requires the establishment of a 10-member ADR roster consisting of 340B experts within OPA, from which three-member panels will be chosen by the OPA director to review claims. 

    • Implements a process to screen ADR Panel members for conflicts of interest.  

    • Removes the $25,000 minimum monetary threshold for claims filed through the ADR process. 

    • Creates a less formal process than what was previously finalized in 2020, in that it would not be governed by the Federal Rules of Civil Procedure and Federal Rules of Evidence. 

    • Establishes a reconsideration process for parties to appeal decisions of the ADR Panel. 

    • Sets out timelines for filing claims, presenting evidence, and responding to claims. 

    The final rule is effective June 18.