The White House office that oversees issuance of federal healthcare regulations now says that this is the target month for releasing a long delayed proposed rule to replace 340B program dispute resolution regulations. But the administration has not given a clear indication why it has been delayed for months and whether it actually will be published soon.
The Office of Management and Budget (OMB) on Tuesday listed June 2022 as the new timetable for publishing a 340B administrative dispute resolution notice of proposed rulemaking.
Background
OMB reviews all significant federal agency regulatory actions before publication in the Federal Register to ensure consistency with the president’s policies and priorities. The 340B ADR proposed rule has been under OMB review since November 2021. The original timetable for publication was January 2022.
Ryan White clinics and health centers sued in October 2020 to force the U.S. Health Resources and Services Administration (HRSA) to issue an ADR final rule. It did so in December 2020 under the Trump administration and the rule took effect in January 2021. ADR petitions have been filed against drug makers Lilly, Astra Zeneca, and Sanofi over their denials of 340B pricing when covered entities use contract pharmacies.
Lilly and Sanofi challenged the ADR final rule’s legality and constitutionality in their lawsuits over HRSA’s findings that the companies’ denials of 340B pricing involving 340B contract pharmacy transactions were illegal. Pharmaceutical Research and Manufacturers of America (PhRMA) filed a similar ADR suit.
The federal district judge in Lilly’s case issued a preliminary injunction in March 2021 shielding Lilly from ADR proceedings. Proceedings against AstraZeneca and Sanofi have continued.
Presidential administrations every fall and spring publish agendas of forthcoming regulatory actions. In the fall 2021 agenda, the Biden administration said its ADR proposed rule to replace the Trump administration’s ADR final rule would better align with the current administration’s drug pricing priorities and better reflect the current state of the 340B program.
New Target Month
OMB this week in the spring 2021 edition of the administration’s regulatory agenda listed June as the new timetable for publishing the ADR proposed rule.
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.
340B Report last month asked HRSA if it or the Health and Human Services Department (HHS) delayed the ADR proposed rule’s review indefinitely. HRSA referred us to OMB. OMB never responded to the question. 340B Report today asked OMB again if HRSA or HHS delayed the review indefinitely.
