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HRSA Describes Proposed 340B User Fee

In its annual budget justification to Congress, HRSA provided a summary of attributes of a possible 340B User fee.
Purpose: The user fee provides the resources needed to improve program integrity and implement statutory provisions while reducing the government expenditure of taxpayer dollars. It will also help address recommendations by the Office of Inspector General (OIG) and Government Accountability Office (GAO) to make major improvements in program integrity. Rationale: The user fee will create a sustainable funding source generated by those who benefit from the program to meet the demands of the existing growth of the Program, the changing marketplace, and the new statutory program requirements. The fee will allow HRSA to better monitor compliance among both manufacturers and covered entities.

Description: 0.1 percent (or one cent for every thousand dollars) of the total 340B drug purchases paid by participating covered entities. The collected user fee is in addition to the entity’s cost to purchase the drug at the 340B price, and does not impact the 340B ceiling price calculation. The user fee would not affect the calculation of the entity’s total acquisition cost of a 340B drug.

Implementation:

  • The fee will be collected from the covered entities into a no-year account established by the Secretary for use by the Secretary and designees in administering operations of the 340B Program (i.e., integrity provisions, access to covered drugs and services for 340B eligible entities.)
  • The manufacturers will periodically report purchases by entities under the 340B program.
  • The fees will be paid by and collected from the entity, and remitted to the Secretary.

Benefit

The user fee collected will address areas of concern that include:

  • Developing/implementing a system to verify the accuracy of the 340B ceiling prices (including policies regarding 340B ceiling price calculation, verification/spot checks of covered entity transactions, sharing via a secure website, etc.)
  • Inquiring into the cause of any pricing discrepancies and take necessary corrective actions (i.e. ensuring manufacturers issue timely refunds for routine retroactive adjustments, erroneous or intentional overcharges)
  • Developing a user fee system (standards, methodology, verification of payments, etc.)
  • Establishing/implementing an administrative process for entity overcharge claims as well as manufacturer claims of violations
  • Imposing civil monetary penalties (manufacturers and entities)

Status: A legislative proposal has also been presented, but there has not been action yet.