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New 340B Dispute Resolution Process: Will It Level the Playing Field?
Monday, August 29, 2016

On August 12, HRSA published a formal proposed rule regarding a 340B Drug Pricing Program administrative dispute resolution (ADR) process. HRSA's use of the administrative rulemaking process is a rare occasion given its perceived limited rulemaking authority granted by Congress. It is critical that stakeholders review HRSA's proposal to consider how it would impact current and future 340B-related disputes, and to determine if the proposed rule goes far enough to level the 340B pricing playing field.

The proposed ADR rule implements a law which requires the Secretary of Health and Human Services (HHS) to establish and implement a binding ADR process for certain disputes arising under the 340B program. When finalized, this proposed rule appears to replace the 340B Program's guidelines on the informal—and seldom used—dispute resolution process. We encourage covered entities, manufacturers and other stakeholders to carefully review the ADR proposal and submit comments on or before October 11, 2016.

The following are key highlights from HRSA's proposal:

  • The ADR process is limited to three subject matters,

  • Decisions of the 340B ADR Panel would be binding,

  • Covered entities may have the right to file civil actions challenging ADR decisions

  • HRSA proposed a 3-year time bar

  • Multiple covered entities may consolidate claims

  • Covered entities may obtain additional information from manufacturers via the ADR process

  • Comments are due on or before October 11, 2016

ADR Panel Composition and Purpose

The rule proposes to create a decision-making body, referred to as the 340B ADR Panel, to resolve claims between covered entities and manufacturers regarding overcharges, diversion, and duplicate discounts.

Initiating the ADR Process

The party filing the claim must include documentation sufficient to support its claim. It is unclear in the proposed rule what burden must be met by the filing party in order to proceed to the ADR process.

Consolidation of Claims and Data Requests

Pursuant to statutory requirements, the proposed rule permits the consolidation of multiple claims against the same entity brought by covered entities or manufacturers.

3-Year Time Limitation

The rule proposes a claim filing deadline of three years from the date of the sale or payment at issue. This timeframe is meant to be consistent with the record retention expectations for the 340B program.

Agency Decision-Making Process

Once the 340B ADR Panel has reviewed the claim and all supporting documentation provided by all parties involved, it will prepare a draft agency decision letter detailing the Panel's findings and conclusions regarding the alleged violation(s).

HRSA Seeks Comments

HRSA is soliciting comments...

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