March 1, 2021

Volume XI, Number 60

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March 01, 2021

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February 26, 2021

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HHS Freezes Rule Affecting Community Health Center’s 340B Drug Discounts

The Biden administration implemented a regulatory rule freeze affecting all federal agency rules that had not gone into effect as of Jan. 20, 2021.  At its core, the regulatory rule freeze requires all pending final rules to be delayed at least 60 days in order for the Biden administration to review and opine on the necessity and scope of affected rules. During this delay period, the administration may review, revise, and possibly rescind federal administrative rules.

Pursuant to the regulatory rule freeze, the Department of Health and Human Services (HHS) has frozen a final rule that would have blocked community health centers (i.e., federally qualified health centers) from receiving future grant funding unless the health centers provided a complete pass-through of 340B discounts on insulin and epi-pens to low-income patients (the 340B Insulin Pass-Through Rule).  Community health centers staunchly opposed the 340B Insulin Pass-Through Rule, arguing that it would have added significant bureaucratic obligations to centers’ operations while making a relatively minimal impact on the costs of drugs provided to center patients. The 340B Insulin Pass-Through Rule was slated to go into effect today, Jan. 22, 2021.

As a result of HHS’ freeze, the effective date of the 340B Insulin Pass-Through Rule has now been delayed until at least March 22, 2021. While there is currently no indication whether the Biden administration will ultimately rescind or revise the 340B Insulin Pass-Through Rule, the delay offers community health centers additional time to develop plans to comply with the 340B Insulin Pass-Through Rule.

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© 2020 Dinsmore & Shohl LLP. All rights reserved.National Law Review, Volume XI, Number 22
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About this Author

Brian Murray, healthcare lawyer, Dinsmore
Associate

Bryan focuses his practice on health care law and provides legal counsel to health care industry clients on a range of issues, such as specialty and mail-order pharmacy operations, provider networks and reimbursement, regulatory compliance, contract review and preparation and 340B programming. He has experience analyzing pharmaceutical trade issues affected by state and federal regulatory frameworks, including pharmacy practice acts, the anti-Kickback Statute, the Drug Supply Chain Security Act, the Stark Law and the Health Insurance Probability and Accountability Act. ...

(412) 339-5603
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