Southwest Consulting Associates Blog

340B Corner: Ceiling Price & Civil Monetary Penalties Proposed Rule Up

Posted by Tanya Frederick on Jul 2, 2015 3:06:00 PM

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340B ceiling price and civil monetary penalties regulationOn Wednesday, June 17, 2015, the proposed rule for 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation was published in the Federal Register for review and comments.  The Department of Health and Human Services (HHS) affirms that the “proposed rule is to provide increased clarity in the marketplace for all 340B Program stakeholders as to the calculation of the 340B ceiling price”.   The proposed rule requires a drug manufacturer to calculate 340B ceiling prices for each covered outpatient drug by National Drug Code (NDC) on a quarterly basis. The proposed rule outlines how to calculate the ceiling price, exceptions when the ceiling price calculation results in a zero or negative 340B price and how to calculate a new drug with no sales data from which to determine the 340B ceiling price.  All requirements for offering the 340B ceiling price to covered entities apply regardless of the distribution system.  The proposed rule declares that, “Manufacturers should consider the wholesaler role in this process and work out issues in good faith and in normal business arrangements regarding the assurance that the covered entity receives the appropriate price as outlined in the regulation”.

The proposed rule also applies a system of civil monetary penalties for drug manufacturers with a pharmaceutical pricing agreement that knowingly and intentionally charge a covered entity more than the ceiling price for a covered outpatient drug.   A drug manufacturer may be fined up to $5,000 for each instance of overcharging the covered entity.  The fine will be in addition to repayment for an instance of overcharging.  According to the proposed rule, the Department of Health and Human Services Office of Inspector General (OIG) has the authority to administer financial sanctions to drug manufacturers that knowingly and intentionally overcharge a covered entity.

Comments are being accepted through August 17, 2015.  We will keep you posted as to when the final rule becomes published.


340B Drug Pricing Program White Paper


Topics: 340B

About This Blog

The climate of provider reimbursement is ever-changing and this blog is intended to keep you up-to-date on the latest information regarding:

  • DSH Reimbursement
  • 340B Pharmacy Drug Discount Program
  • Compliance Issues
  • Litigation Surrounding Provider Reimbursement

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