Life Science Compliance Update

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August 29, 2016

HRSA Releases Proposed Rule on 340B ADR Program


On August 12, 2016, the Health Resources and Services Administration (HRSA) published a proposed rule: “340B Drug Pricing Program; Administrative Dispute Resolution.” The Affordable Care Act required the Department of Health and Human Services (HHS) to promulgate a regulation that establishes and implements a binding administrative dispute resolution (ADR) process for resolving certain disputes under the 340B Program.

This proposed rule lays out the requirements and procedures that will apply to all drug manufacturers and covered entities that participate in the program. HRSA states that the ADR process is not intended to mock trial and should be used as a last resort, after good faith efforts to resolve disputes have been unsuccessful. There is a sixty day comment period for stakeholders.

Proposed Rule Highlights

Administrative Dispute Resolution Panel

HRSA proposes to establish a decision-making body to review and make binding decisions for claims filed by covered entities and manufacturers. The proposed panel will be made up of federal employees who have expertise in, and experience with, the 340B Program. HRSA welcomes comments on the proposed size and composition of the panel.


The ADR process is intended to be used with two different types of claims: (1) claims by covered entities who believe they have been overcharged for covered outpatient drugs by manufacturers and (2) claims by manufacturers that a covered entity has violated the prohibition on diversion to ineligible patients or duplicate discounts. This can only be done by manufacturers after they have conducted an audit. In the proposed rule, HRSA proposes that a claim be filed in writing within three years of the date of the sale or payment at issue and include sufficient documentation for the claim to be evaluated.

Consolidated Claims

HRSA proposes requirements for a covered entity to request consolidation of individual claims. Consolidated claims may also be made on behalf of covered entities by associations or organizations representing their interests. The ACA, however, disallows consolidated claims on behalf of manufacturers by associations or organizations representing their interests. HRSA would like specific feedback related to consolidated claims for manufacturers.


HRSA proposes that the part that files the claim must send the opposing party written notice within three business days. HRSA will make a determination regarding whether all requirements for a claim have been met and notify all parties within twenty business days of receiving the claim. If all requirements have been met, the claim will be forwarded on to the ADR Panel. HRSA proposes that the opposing party have twenty business days to submit their written response to the allegations, to both the Panel and the complaining party.

Final Agency Decision

In the proposed rule, HRSA proposes that the Panel prepare a draft letter that includes findings and conclusions regarding the alleged violation. The draft letter will be sent to all parties and allow for a twenty-day response period. Once responses to the draft letter have been received, the Panel will issue the final decision. The Final Decision will be binding on all parties involved, unless invalidated by a court order.

Comment Submission Information

Interested stakeholders can submit comments, identified by the Regulatory Information Number (RIN) 0906-AA90 via: (1) the Federal eRulemaking Portal; (2) email to; or (3) regular, express, or overnight mail to CAPT Krista Pedley, Director, Office of Pharmacy Affairs (OPA), Healthcare Systems Bureau (HSB), HRSA, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857.

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