The Biden administration yesterday withdrew former U.S. Health and Human Services (HHS) Secretary Alex Azar’s Jan. 20 public notice of his appointment of six voting and two ex-officio non-voting members to a new 340B program administrative dispute resolution (ADR) board.
The legal effect of the new administration’s action is unknown. The Trump administration’s Dec. 14 final rule establishing the ADR process took effect Jan. 13. The ADR final rule itself has not been withdrawn under White House Chief of Staff Ron Klain’s Jan. 20 “Regulatory Freeze Pending Review” memo, which covered Trump administration rules not yet published in the Federal Register and published rules that had not yet taken effect when President Biden took office at noon on Wednesday.
The new administration appears to have withdrawn Azar’s public notice of his appointments to the ADR board pursuant to Klain’s regulatory freeze memo. But it is not known whether that definitely was the case.
It is not clear if Azar’s appointments to the ADR board took effect the moment on Jan. 20 that he signed the document that then was posted on the Federal Register website for public inspection. Nor is it clear if the Biden administration negated Azar’s appointments to the board by withdrawing the document yesterday, stopping it from being formally published in the Federal Register. We have reached out to HHS for its take. We’ve also reached out to legal experts for their opinions.
The practical effect of the new administration’s action is unclear. It may slow down action brought under the two known petitions filed under the ADR system. How long that could last, and how any delay affects related lawsuits by health centers and Ryan White grantees against HHS over its enforcement of its 340B contract pharmacy requirements, is not known. It’s possible the new administration withdrew Azar’s notice just to give itself time to review Azar’s appointees backgrounds for any red flags, and if it finds none, it will let Azar’s appointments stand. Xavier Becerra, President Biden’s pick for HHS secretary, has made it clear where he stands on the contract pharmacy controversy. In December, he helped spearhead a bipartisan letter from 28 state attorneys general calling upon Sec. Azar to act against drug manufacturers who have refused to provide 340B pricing in contract pharmacy settings. Becerra, currently California’s attorney general, is awaiting Senate confirmation.
