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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

HHS Releases Final Rule Addressing 340B Drug Ceiling Prices and CMPs

January 6, 2017—The Department of Health and Human Services (HHS) Jan. 4 released a final rule on the calculation of the 340B ceiling price and application of civil monetary penalties (CMPs) that will apply to all drug manufacturers that are required to make their drugs available to covered entities under the 340B Drug Pricing Program. This rule implements a provision in the Affordable Care Act that required HHS to publish the methods for calculating 340B ceiling prices. The rule also imposes CMPs on manufacturers that overcharge a covered entity. 

The rule finalizes the:

  • requirement that a manufacturer calculate the 340B ceiling price on a quarterly basis;

  • new “penny pricing” policy for certain drugs that requires manufacturers to charge $0.01 per unit measure for a drug whose calculated ceiling price is less than $0.01;

  • new methodology manufacturers must use when estimating the ceiling price for a covered outpatient drug; and

  • explanation of how a CMP would be imposed on a manufacturer that knowingly and intentionally overcharges a covered entity. 

While the rule will be effective Feb. 28, 2017, the Health Resources and Services Administration plans to begin enforcing the requirements in the final rule at the start of the next quarter, which begins April 1, 2017.

The AAMC commented on the proposed rule, stressing “the importance of the 340B Drug Pricing Program to teaching hospitals in expanding access to care.” [see Washington Highlights, Oct. 14].

Contact:

Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084
Email: mmullaney@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Program & Policy Specialist, Govt Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org