The Biden administration today moved to rescind the Trump administration final rule requiring health centers to pass along their 340B savings on insulin and epinephrine pens to low-income patients.

Biden Administration Proposes to Rescind Trump’s 340B Health Center Insulin Rule

The Biden administration this morning formally announced plans to rescind the controversial Trump administration final rule requiring community health centers to pass along all 340B drug discount savings on insulin and injectable epinephrine to low-income patients, as a condition for keeping their federal health center program grants.

The Health Resources and Services Administration (HRSA) posted the rescission proposal for public inspection on the Federal Register website. The actual proposed rule to do away with requirement will be published tomorrow. There will be a 30-day public comment period. Comments will be due on or before July 16.

The rule originally was due to take effect Jan. 22. The Biden administration on Jan. 21 froze it for 60 days. On March 19, it delayed the effective date again, to July 20. It said it would use the second delay to consider whether revision or withdrawal of the rule was warranted, and solicited comments.

“HHS is proposing the rescission due to undue administrative costs and burdens that implementation would impose on health centers,” HRSA said. “In particular, the final rule would require health centers to create and sustain new practices necessary to determine patients’ eligibility to receive certain drugs at or below the discounted price paid by the health center or subgrantees under the 340B Program, resulting in reduced resources available to support critical services to their patients—including those who use insulin and injectable epinephrine.  These challenges would be significantly exacerbated by the multitude of demands on health centers related to the COVID-19 pandemic.”

“This rule will result in a loss of revenue from 340B savings for health centers participating in the 340B Program and this loss, along with increased administrative costs and administrative burden, will result in reduced resources being available to support services to health center patients,” HRSA said. “In addition, most commenters noted that, in many cases, these health centers already provide medications at reduced prices to their patients.”

HRSA said “commenters expressed concerns that the rule was based on a fundamental misunderstanding of the 340B Program since health centers are already required by the Health Center Program to use any savings to benefit their patient population,” HRSA said. “HHS shares their concerns that this rule will result in a loss of 340B revenue for health centers participating in the 340B Program, and that this loss, along with increased administrative costs and administrative burden, will result in reduced resources available to support critical services to health center patients, including those who use insulin or injectable epinephrine and who receive other services from health centers. “

The Biden administration has received some criticism from conservative news outlets and organizations about the plan to drop President’s Trump’s insulin rule.  The most recent salvo appeared in a June 11 article in Hot Air.

Last September, 104 U.S. House Democrats asked then-HHS Secretary Alex Azar to rescind or not implement Trump’s executive order. They said it “may be well-intentioned, but it is not the solution to our country’s high drug prices.” Rep. Cindy Axne (D-Iowa) led the drive to get House colleagues to sign the letter.

Former President Trump’s July 2020 executive order directing HHS to condition health centers’ future Section 330 grants on making insulin and EpiPen-type products available to low-income individuals at 340B cost “remains in effect,” HRSA said. “Should the final rule be rescinded, other implementation approaches will be considered to effectuate the Executive Order.”

We asked the White House press office if President Biden ultimately is going to withdraw the executive order or will let it remain in effect. Considering that the administration is recommending rescinding the rule, observers think the executive order will be shelved. 

Health center representatives hailed the proposal to rescind Trump’s 340B insulin rule.

The National Association of Community Health Centers (NACHC) said it “appreciates the Biden administration recognizing that this rule would not increase access for patients but would place an immense burden on the health center program.

“Since last fall, NACHC has consistently voiced concerns about the impact of this rule based on a fundamental misunderstanding of the health center mission. Under the 340B program health centers are required to invest every penny of savings back into patient care and will continue to provide patients affordable medications,” the group said.

“It is encouraging to see HHS acknowledge health centers’ vital role in the COVID-19 pandemic response and the significance of health centers devoting all of their resources to patient care, instead of implementing the proposed changes under the final rule,” it said.

“We applaud the Biden-Harris administration’s action to relieve the nation’s health centers and all safety net providers, from administrative burden that would not have reduced drug prices,” said Amanda Pears Kelly, executive director of Advocates for Community Health, a new association of health centers. “We look forward to working closely with the administration to implement meaningful policy changes that will ensure all patients can access the medicines they need.”