HHS OIG has raised the civil monetary penalty for overcharging a 340B covered entity to adjust for inflation.

As Contract Pharmacy Losses Climb into the Billions, Fine for Overcharging 340B Providers Gets Closer to $6,000 Per Instance Mark

The federal fine for overcharging a 340B covered entity just went up from $5,883.00 to $5,953.00 per each instance of overcharging.

The U.S. Health and Human Services Department (HHS) Office of Inspector General (OIG) posted its annual inflation adjustments to maximum civil monetary penalty (CMP) amounts in yesterday’s Federal Register. A 340B program regulation that took effect in January 2019 says that any drug manufacturer that knowingly and intentionally charges a covered entity more than the ceiling price for a covered outpatient drug may be subject to a CMP not to exceed $5,000 for each instance of overcharging. Congress passed a law in 2015 that adjusts HHS CMPs for inflation.

The 340B manufacturer CMP final rule defines “instance” as any order, by NDC, regardless of the number of units of each NDC ordered, that results in a covered entity paying above the 340B ceiling price.

The U.S. Health Resources and Services Administration (HRSA) has referred six manufacturers—AstraZeneca, Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics—to OIG for possible imposition of CMPs for refusing to comply with HRSA’s findings that the companies’ contract pharmacy policies have resulted in illegal overcharges. The CMP would be on top of refunds for the overcharges.

The six manufacturers plus a seventh, Boehringer Ingelheim, are suing HRSA over its findings. The judge in Sanofi and Novo Nordisk’s cases observed in a footnote in her Nov. 5 joint ruling in the two cases that the six manufacturers’ contract pharmacy pricing policies reduced entities’ 340B savings by $3.2 billion in 2020.