340B Health Statement on New Price Ceiling and Monetary Penalty Rule
Today’s new 340B drug discount program rule should help prevent the drug industry from overcharging America’s 340B health providers for lifesaving medicines. It’s a welcome development in light of public outrage about the unsustainable cost of prescription drugs.
By specifying how 340B ceiling prices should be calculated, the regulation will help ensure those prices are right. Under the new rule, a drug manufacturer that knowingly and intentionally overcharges a 340B hospital or other 340B provider can be fined up to $5,000 for each instance of overcharging. Manufacturers also will have to ensure that their distributors give providers the 340B ceiling price.
We are pleased that the regulation:
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Reaffirms and incorporates HRSA’s long-standing policy requiring a manufacturer to sell a drug at a penny if the manufacturer raises the drug’s price to such a high degree that it triggers an inflationary penalty and results in a 340B ceiling price calculation of $0.00
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Requires manufacturers to offer refunds for overcharges on new drugs instead of maintaining the current rule requiring covered entities to request refunds
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Gives OIG responsibility for imposing 340B manufacturer civil monetary penalties, given OIG’s extensive experience applying CMPs in other contexts.
Finally, the final rule cites data showing that 340B sales still make up only a tiny percentage (2.6 percent) of the overall U.S. drug market.