The U.S. Health Resources and Services Administration’s (HRSA) proposed replacement for its year-old 340B administrative dispute resolution (ADR) process has been under White House review for almost 100 days—nearly a month longer that the anticipated release date announced in November.
HRSA sent the proposed rule to the Office of Management and Budget (OMB) for approval on Nov. 18, 2021. At that time, it said it expected to publish the proposed rule in January. HRSA said the new rule “better aligns with the President’s priorities on drug pricing, better reflects the current state of the 340B program, and seeks to correct procedural deficiencies in the 340B ADR process.”
HRSA yesterday said it had no comment on the proposed rule’s status.
Since President Biden’s inauguration, his budget office has taken 54 days on average to review the 105 regulations and sub-regulatory guidance documents that the U.S. Health and Human Services Department (HHS) has sent it for approval. The average number of OMB review days under Biden for all federal agency documents is 62.
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 period can be reviewed indefinitely by the head of the rulemaking agency, or the OMB director can extend the review period on a one-time basis for no more than 30 days.
After a 10-year delay, HRSA published the current ADR final rule in December 2020. It took effect in January 2021. Ryan White Clinics for 340B Access and the National Association of Community Health Centers sued it in October 2020 to try to force it to issue the rule.
In March 2021, a federal district judge in Indianapolis issued a preliminary injunction shielding drug manufacturer Lilly from ADR proceedings brought against it by NACHC, saying that it was very likely that she would ultimately strike down the rule on the grounds that the Trump administration should have required additional notice and comment on the ADR rule.
ADR proceedings currently are underway against AstraZeneca and Sanofi.
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.
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.”