Biden Administration Rescinds Trump Administration Insulin Pricing Rule

One of the final healthcare actions made by the Trump Administration has been rescinded by the Biden Administration. On December 23, 2020, the Trump Administration finalized a rule that directed the Department of Health and Human Services (HHS) to take action to require that federally qualified health centers (FQHCs) make insulin and injectable epinephrine available to certain patients at 340B prices. The Biden Administration delayed the rule twice before it became effective on July 20, 2021, and the first opportunity for HHS to impose the requirements of the rule would have been through grants awarded in fiscal year 2022. So, while the rule has been in effect since July, it has yet to be implemented.

In the Federal Register notice rescinding the rule, HHS noted that the rule would have resulted in “excessive administrative costs and burdens” on health centers. Specifically, the agency took issue with the requirement that health centers would need to create and maintain new practices to determine patients’ eligibility to receive drugs at or below the discounted price paid by the health center, plus a minimal fee. HHS also noted its belief that the implementation of the Rule would have resulted in “reduced resources available to support critical services to health center patients – including those who use insulin and injectable epinephrine.

HHS further acknowledged concerns expressed “by the vast majority of commenters” that the “low income” definition of 350% of the federal poverty level would have “created significant administrative challenges for health centers” and that those challenges would have resulted in a diversion of resources from patient care in the midst of the COVID-19 pandemic.

Rescinded Provisions

Provisions in the Final Rule that are now rescinded include the following:

• Providers that are covered entities under the 340B Drug Pricing Program and that seek funding under Section 330(e) of the Public Health Service Act would have needed to offer insulin and injectable epinephrine to its patients to qualify for the grants.
• FQHC patients with incomes at or below 350% of the federal poverty level and with either: insurance with a high cost-sharing requirement for insulin or injectable epinephrine, a high unmet deductible, or no health insurance, would have been able to purchase drugs at 340B prices plus a “minimal administration fee.” In order to qualify for 340B pricing, the patients would have been required to receive services from health centers other than just the dispensing of the drugs.
• The “minimal administration fee” included in the Final Rule would have been expected to include any dispensing fee, counseling costs, or other charges associated with the patient receiving the medication. HHS noted in the rescission that such fees should not create a barrier to low-income patients and that health centers would have needed to make “every reasonable effort” to keep those fees as low as possible.

Additionally, the program term established by the “Implementation of Executive Order on Access to Affordable Life-Saving Medications” will not be included on any future Notices of Award issued to health centers that receive grant funds under Section 330(e) of the Public Health Service Act.

What’s Next?

While HHS is rescinding the Final Rule, President Trump’s Executive Order 13937 that laid the foundation for the Final Rule remains in effect. Therefore, HHS noted in the rescission that it is “exploring non-regulatory options to implement the Executive Order.”