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Paige Jennings is an associate in Covington’s Washington office. She works with the firm’s Federal–State Programs, Health Care, Antitrust, and Litigation practice groups. Ms. Jennings joined the firm after a number of years working on health policy matters in the government and private sectors. Prior to earning her law degree and Master of Public Affairs, she worked in the U.S. Senate for over four years, advising Senators John Breaux and Tom Carper on health and social policy matters. Ms. Jennings later handled federal health policy issues at WellPoint, Inc. During law school, she worked with the U.S. Office of Management and Budget during consideration of the Affordable Care Act, and with the Federal Trade Commission for then-Chairman Jon Leibowitz.

On Monday, April 18th, the Health Resources and Services Administration (“HRSA”) and the Department of Health and Human Services (“HHS”) reopened the comment period for their proposed rule “340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation” (“Proposed Rule”).  Originally issued on June 17, 2015, the Proposed Rule sought to implement the civil monetary penalty (“CMP”) and ceiling price calculation provisions created by the 2010 amendment to Sec. 340B of the Public Health Service Act (“PHSA”) (for additional information on the Proposed Rule, please see our October 2015 webinar materials on the subject).  Comments were due August 17, 2015 and stakeholders vigorously commented on HRSA’s proposed penny policy for the ceiling price calculation, the lack of clarity regarding the new drug estimate calculation, and the liability standard for CMPs.

Continue Reading HRSA Seeks a Second Round of Comments on 340B Penny Pricing, New Drug Estimates, and Civil Monetary Penalties

On June 17, 2015, the Health Resources and Services Administration (HRSA) published a proposed rule to clarify how manufacturers should calculate the ceiling price for covered outpatient drugs under the 340B program, and to provide for civil monetary penalties (CMPs) on manufacturers that “knowingly and intentionally” overcharge 340B covered entities.[1]  The ceiling price provisions are not expected to significantly change manufacturers’ current practices; however, the possibility of CMPs is a new aspect of the 340B program.  Although HRSA speculates that the use of CMPs will “probably be rare,” the proposed rule does not provide significant guidance regarding what constitutes a knowing and intentional violation.  The rule would also subject manufacturers to liability for failure to ensure that covered entities receive 340B pricing from wholesalers or other distributors, raising questions about manufacturers’ obligations to oversee these entities.
Continue Reading HRSA Proposes Calculation of 340B Ceiling Prices, Implementation of Manufacturer Civil Monetary Penalties