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A proposed replacement for the 340B administrative dispute resolution process has been under White House review for more than six months.

340B ADR Proposed Rule Remains at White House 5 Months Past Expected Publication Date

A proposed replacement for the 340B administrative dispute resolution (ADR) process has been under White House review for more than half a year. It seems to be no closer to publication for notice and comment than it was when it got to the White House last November.

The U.S. Health Resources and Services Administration (HRSA) sent the proposed rule to the Office of Management and Budget (OMB) for approval on Nov. 18, 2021. At the time, the projected timetable for publication was January 2022. In December 2021, the Biden administration provided more details on its plans, announcing that it wanted to replace the ADR regulation which was enacted in the last days of the Trump administration, with an entirely new rule that “better aligns with the president’s priorities on drug pricing [and] better reflects the current state of the 340B program.”

OMB reviews all significant federal agency regulatory actions before publication in the Federal Register to ensure consistency with the president’s policies and priorities.

There is no statutory limit on how long OMB can take to review an agency regulation or guidance document. Under a Clinton administration executive order, the period for OMB review is limited to 90 days. The OMB director can extend the review period on a one-time basis for no more than 30 days. The review period also can be extended indefinitely by the head of the rulemaking agency.

HRSA referred a question about whether it or the Health and Human Services Department (HHS) pressed pause on the review to OMB. OMB has not yet responded to the same inquiry.

HRSA says on the OMB website that its proposed replacement for its existing ADR rule “would establish new requirements and procedures for the 340B program’s ADR process. This administrative process would allow covered entities and manufacturers to file claims for specific compliance areas outlined in the statute after good faith efforts have been exhausted by the parties.”

ADR proceedings are underway against AstraZeneca and Sanofi over their 340B contract pharmacy policies. In March 2021, a federal district judge issued a preliminary injunction shielding drug manufacturer Lilly from ADR proceedings over its 340B contract pharmacy policies. 

Pharmaceutical Research and Manufacturers of America (PhRMA) is suing HRSA in federal district court in Baltimore, Md., to strike down both the existing 340B ADR rule and guidelines governing drug manufacturer audits of 340B covered entities.

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