Rule2024-08262
340B Drug Pricing Program; Administrative Dispute Resolution Regulation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 19, 2024
Effective
June 18, 2024
Issuing agencies
Health and Human Services Department
Abstract
The Health Resources and Services Administration administers section 340B of the Public Health Service (PHS) Act, which is referred to as the "340B Drug Pricing Program" or the "340B Program." This final rule will apply to all drug manufacturers and covered entities that participate in the 340B Program. The final rule sets forth the requirements and procedures for the 340B Program's administrative dispute resolution (ADR) process. This final rule revises the 340B administrative dispute resolution process set forth in the Code of Federal Regulations.
Full Text
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<title>Federal Register, Volume 89 Issue 77 (Friday, April 19, 2024)</title>
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[Federal Register Volume 89, Number 77 (Friday, April 19, 2024)]
[Rules and Regulations]
[Pages 28643-28659]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08262]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
42 CFR Part 10
[Docket No. 2021-0004]
RIN 0906-AB28
340B Drug Pricing Program; Administrative Dispute Resolution
Regulation
AGENCY: Health Resources and Services Administration (HRSA), Department
of Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: The Health Resources and Services Administration administers
section 340B of the Public Health Service (PHS) Act, which is referred
to as the ``340B Drug Pricing Program'' or the ``340B Program.'' This
final rule will apply to all drug manufacturers and covered entities
that participate in the 340B Program. The final rule sets forth the
requirements and procedures for the 340B Program's administrative
dispute resolution (ADR) process. This final rule revises the 340B
administrative dispute resolution process set forth in the Code of
Federal Regulations.
DATES: This final rule is effective June 18, 2024.
FOR FURTHER INFORMATION CONTACT: Michelle Herzog, Deputy Director,
Office of Pharmacy Affairs, HRSA, 5600 Fishers Lane, Mail Stop 08W12,
Rockville, MD 20857; email: <a href="/cdn-cgi/l/email-protection#1320272371727761537b6160723d747c65"><span class="__cf_email__" data-cfemail="3d0e090d5f5c594f7d554f4e5c135a524b">[email protected]</span></a>; telephone: 301-594-4353.
SUPPLEMENTARY INFORMATION:
I. Background
Section 340B of the PHS Act entitled ``Limitation on Prices of
Drugs Purchased by Covered Entities,'' was created under section 602 of
Public Law 102-585, the ``Veterans Health Care Act of 1992,'' and
codified at 42 U.S.C. 256b. The 340B Program is intended to enable
covered entities ``to stretch scarce Federal resources as far as
possible, reaching more eligible patients and providing more
comprehensive services.'' H.R. Rep. No. 102-384(II), at 12 (1992). The
Secretary of Health and Human Services (Secretary) has delegated the
authority to administer the 340B Program to the HRSA Administrator, who
has further delegated authority to the Office of Pharmacy Affairs
(OPA), within HRSA, which oversees the 340B Program. Eligible covered
entity types are defined in section 340B(a)(4) of the PHS Act, as
amended. Section 340B(a)(1) of the PHS Act instructs HHS to enter into
pharmaceutical pricing agreements (PPAs) with manufacturers of covered
outpatient drugs. Under section 1927(a)(5)(A) of the Social Security
Act, a manufacturer must enter into an agreement with the Secretary
that complies with section 340B of the PHS Act ``[i]n order for payment
to be available under section 1903(a) or under part B of title XVIII of
the Social Security Act for covered outpatient drugs of a
manufacturer.'' When a drug manufacturer signs a PPA, it agrees that
the prices charged for covered outpatient drugs to covered entities
will not exceed statutorily defined 340B ceiling prices. 340B ceiling
prices are based on quarterly pricing reports that manufacturers must
provide to the Secretary through the Centers for Medicare & Medicaid
Services (CMS) and are calculated and verified by HRSA.
Section 7102 of the Patient Protection and Affordable Care Act
(Pub. L. 111-148), as amended by section 2302 of the Health Care and
Education Reconciliation Act (Pub. L. 111-152), jointly referred to as
the ``Affordable Care Act,'' added section 340B(d)(3) to the PHS Act,
which requires the Secretary to promulgate regulations establishing and
implementing a binding 340B ADR process for certain disputes arising
under the 340B Program. Under the 340B statute, the purpose of the 340B
ADR process is to resolve (1) claims by covered entities that they have
been overcharged for covered outpatient drugs by manufacturers and (2)
claims by manufacturers, after a manufacturer has conducted an audit as
authorized by section 340B(a)(5)(C) of the PHS Act, that a covered
entity has violated the prohibition on diversion or duplicate
discounts.
The 340B ADR process is an administrative process designed to
assist covered entities and manufacturers in resolving disputes
regarding overcharging, duplicate discounts, or diversion, as outlined
in statute. This 340B ADR process is also designed to provide
stakeholders the opportunity to have disputes evaluated in a timely,
consistent, and fair and equitable manner.
Historically, HHS has encouraged manufacturers and covered entities
to work with one another to attempt to resolve disputes in good faith.
HHS recognizes that most disputes that occur between individual parties
are resolved in a timely manner without HRSA's involvement. The 340B
ADR process is not intended to replace these good faith efforts and
should be considered only when good faith efforts to resolve disputes
independently have been exhausted and failed.
In 2020, HHS issued a final rule ((85 FR 80632, Dec. 14, 2020)
herein referred to as the 2020 final rule), which was codified at 42
CFR 10.20 through 10.24. HRSA began implementing the 2020 final rule
when it became effective on January 13, 2021, by accepting claims
through the 340B ADR process. HRSA encountered policy and operational
challenges with implementation of the 2020 final rule and issued a
notice of proposed rulemaking (NPRM) on November 30, 2022 (87 FR
73516), to propose a revision to the 340B ADR process.
HHS is issuing this final rule to revise the current ADR process by
modifying the regulations issued under the 2020 final rule. As HHS has
indicated in the 2022 NPRM, the 2020 final rule poses policy and
operational challenges that are described in this section.
First, HHS is finalizing that the 340B ADR process be revised to be
more accessible, administratively feasible and timely than the 2020
final rule. The 340B statute at section 340B(d)(3)(B)(ii) of the PHS
Act, requires the establishment of deadlines and procedures that ensure
that claims are resolved fairly, efficiently, and expeditiously. This
ADR process should be an expeditious and less formal process for
parties to resolve disputes than the 2020 final rule. An ADR process
governed by the Federal Rules of Evidence (FRE) and Civil Procedure
(FRCP), as envisioned in the 2020 final rule, does not advance these
goals. For example, potential petitioners, many of whom are safety net
providers in under-resourced communities, may lack the resources to
undertake ADR even if it would be in their best interest to do so. In
addition, reliance on the FRE and FRCP could create unnecessary delays
in what is intended to be a timely decision-making process. Finally, it
is challenging to assign ADR Panel members with expertise in the FRE or
FRCP. In implementing the 2020 final rule, HRSA received questions from
stakeholders about the formality of the ADR process and the legal
requirements under the FRCP for submitting a petition and accompanying
documents, e.g., whether the filings submitted must conform to the
FRCP, which added to the complexity and difficulty of the ADR process.
HHS is finalizing an ADR process that is designed to assist covered
entities and manufacturers in resolving disputes regarding
overcharging, duplicate discounts, or diversion, as set forth in the
340B statute. HHS believes that for the ADR process to be workable, it
needs to be accessible. HHS recognizes that many covered entities are
small,
[[Page 28644]]
community-based organizations with limited means. These covered
entities may not have the financial resources to hire an attorney to
navigate the complex FRCP and FRE requirements and engage in a lengthy,
trial-like process, as envisioned in the 2020 final rule. The 340B
statute does not compel such a process. The 2020 final rule also
institutes a minimum threshold of $25,000 or where the equitable relief
sought will likely have a value of more than $25,000 to be met before
the petition could be filed. Given the smaller, community-based nature
of many covered entities, HHS believes that flexibility should be
maintained with respect to the amount of damages and is therefore not
finalizing a minimum threshold for accessing the ADR process. However,
covered entities and manufacturers should carefully evaluate whether
the ADR process is appropriate for minor or de minimis claims given the
time and resource investment required of the parties involved. After
deliberate consideration of these issues and review of the comments,
HHS is finalizing rule provisions that create a more accessible process
where stakeholders have equal access to the ADR process and can easily
understand and participate in it without having legal expertise or
expending significant resources.
Second, the 2020 final rule states that the Secretary of HHS shall
establish a 340B ADR Board that consists of at least six members
appointed by the Secretary with equal numbers from HRSA, CMS, and the
HHS Office of the General Counsel (OGC). It also requires the HRSA
Administrator to select three members from the ADR Board to form a 340B
ADR Panel and that each 340B ADR Panel include one ex-officio, non-
voting member (appointed by the Secretary) from OPA to assist the 340B
ADR Panel. The 2020 final rule states that HRSA and CMS ADR Board
members must have relevant expertise and experience in drug pricing or
drug distribution and that the OGC ADR Board members must have
expertise and experience in handling complex litigation. While the 340B
Program is related to drug pricing and drug distribution, it is a
distinct program that requires knowledge of the 340B statute and
specific 340B Program operations. Few OGC, CMS, and HRSA employees
(outside of OPA) have both the required expertise as well as the
availability (in addition to their day-to-day responsibilities) to
serve on such 340B ADR Panels.
Therefore, HHS is finalizing rule provisions requiring that 340B
ADR Panel members should be subject matter experts from OPA to ensure
Panel members have specific knowledge of the authorizing statute and
the operational processes of the 340B Program (e.g., registration and
program integrity efforts) and the ability to dedicate a portion of
their time to ADR Panel service. Moreover, decisions by subject matter
experts from OPA are less likely to conflict with current 340B policy.
All members on the 340B ADR Panel will undergo an additional screening
prior to reviewing a specific claim to ensure that the 340B ADR Panel
member was not involved in previous agency actions related to the claim
(including previous 340B ADR Panel decisions).
Third, HHS is finalizing final rule provisions stating that prior
to initiating the ADR process, parties must undertake good-faith
efforts to resolve the disputed issues. Historically, HRSA has
encouraged parties to work in good faith and covered entities, and
manufacturers have not had significant numbers of disputes due to the
success of these good-faith-resolution efforts. 340B Program
administrative improvements have narrowed the areas where parties had,
in the past, disagreed over 340B Program issues. For example, HRSA
released the pricing component of the 340B Office of Pharmacy Affairs
Information System (340B OPAIS) in February 2019, which, for the first
time, provided 340B ceiling prices to authorized covered entity users.
OPAIS implementation has provided the necessary transparency to
decrease disputes specific to the 340B ceiling price and its
calculation. Outside of an issue involving some manufacturers placing
restrictions on certain covered entities use of contract pharmacies,
OPA has only received three covered entity overcharge complaints since
making 340B ceiling prices available to covered entities through 340B
OPAIS. Of additional note, prior to the 2020 final rule, stakeholders
were able to utilize an informal dispute resolution process to resolve
disputes between covered entities and manufacturers (61 FR 65406, Dec.
12, 1996) (``1996 guidelines''). There have been only four informal
dispute resolution requests since the publication of the 1996
guidelines. Of the four informal dispute resolution requests received,
two were terminated by HRSA due to non-participation by one of the
parties, another was dismissed due to lack of sufficient evidence, and
the last was terminated because the parties disputed each other's
attempts of good faith resolution. The relatively small number may also
be attributed to the parties' successful attempts to resolve issues in
good faith. With this very small number of past informal disputes, the
increased transparency in 340B pricing data, and HRSA's encouragement
that parties work to resolve issues in good faith, HHS is finalizing
final rule provisions that include an ADR process more closely aligned
with the process that was established in the 1996 guidelines, and less
trial-like and resource-intensive--for both the participants and HHS--
than that established in the 2020 final rule.
Also, in the time since Congress enacted the 340B ADR statutory
provision, HRSA implemented its extensive audit program in 2012, which
ensures that participating covered entities and manufacturers can
demonstrate compliance with all 340B Program requirements. On average,
HRSA conducts 200 covered entity audits each fiscal year including
child/associate sites and contract pharmacies associated with the
covered entities, and issues findings in three areas: eligibility,
diversion, and duplicate discounts. These findings vary in terms of
severity--from covered entities not having the correct information in
the 340B OPAIS to the diversion of 340B drugs to individuals who are
not patients of the covered entity. HRSA conducts approximately five
manufacturer audits each year and makes findings related to
manufacturers charging above the 340B statutorily required ceiling
price and manufacturers not reporting the required 340B pricing data to
HRSA. Since HRSA began auditing covered entities and manufacturers,
HRSA has identified 340B compliance concerns that would have previously
been disputed. In addition to the extensive audit program, HRSA has
also developed a comprehensive program integrity strategy to ensure
compliance among all stakeholders participating in the 340B Program.
These activities include quarterly checks of 340B Program eligibility,
a self-disclosure and allegation process, which involves communication
between OPA and the stakeholders regarding the compliance issue, and
spot checks of covered eligibility documentation including contracts
with State and local governments and contract pharmacy agreements.
Further, manufacturers are required to audit a covered entity prior
to filing an ADR claim pursuant to section 340B(d)(3)(B)(iv) of the PHS
Act. Since November 2022, HRSA has received two final audit reports
from the manufacturers. The infrequency of finalized manufacturer audit
reports along with the requirement that
[[Page 28645]]
manufacturers audit covered entities prior to filing an ADR claim
suggests that the number of manufacturer ADR claims will be low.
HRSA's impartial facilitation of good faith resolution efforts have
allowed parties to take advantage of opportunities for open
communication to better understand each other's positions and come to
an agreement, without need for formal intervention by HRSA (e.g.,
through a HRSA targeted audit).
Fourth, the ADR process should be reserved for those disputes set
forth in the statutory ADR provision (overcharge, diversion, or
duplicate discount). For example, a manufacturer that audited a covered
entity may report its findings of alleged duplicate discounts
identified by specific purchasing patterns over a period of time. The
covered entity may disagree with the audit assessment of purchases. In
this example, the matter would be best resolved through the ADR process
as it involves an alleged duplicate discount violation.
This final rule aligns with the statutory provisions by outlining
the specific types of claims that can be brought forth through the ADR
process--claims for overcharge, diversion or duplicate discounts.
Fifth, HHS believes that there should be an opportunity for
dissatisfied parties to seek reconsideration of the 340B ADR Panel's
decision by HRSA. The 2020 final rule did not include such a process.
This final rule establishes an appeals or reconsideration process
option that would be made available to either party.
Therefore, based on these issues with the 2020 final rule, HHS is
finalizing in this rule to (1) establish a more accessible ADR process
that is reflective of an administrative process rather than a trial-
like proceeding; (2) revise the structure of the 340B ADR Panel so that
it is comprised of 340B Program subject-matter experts; (3) ensure that
the parties have worked in good faith before proceeding through the ADR
process; (4) more closely align the ADR process with the provisions set
forth in the 340B statute (diversion, duplicate discounts, and
overcharges); and (5) include a reconsideration process for parties
dissatisfied with a 340B ADR Panel's decision.
HRSA received 112 non-duplicative comments and, after consideration
of the comments received, HHS has developed this final rule.
II. Summary of Proposed Provisions and Analysis and Responses to Public
Comments
Part 10 of title 42 of the Code of Federal Regulations has been
revised to incorporate changes to the 340B ADR process, which is
described below in conjunction with the comments received to each such
section.
General Comments
Comments received during the comment period addressed general
issues that were raised in the preamble of the NPRM. We have summarized
these general comments and have provided a response below.
Comment: The 2020 final rule instituted a minimum threshold of
$25,000 or where the equitable relief sought would likely have a value
of more than $25,000 as an ADR petition prerequisite. In the NPRM, HHS
did not propose a minimum threshold for accessing the 340B ADR process.
Many covered entity comments favored eliminating the threshold and
argued that the 340B ADR process would be more accessible and would
help ensure all providers could seek relief through the 340B ADR
process. Most manufacturer comments were against eliminating the
minimum threshold and argued that de minimis claims and frivolous
claims would be filed through the 340B ADR process.
Response: Many 340B covered entities are small, rural or health
care providers in underserved areas. The 340B ADR process should be
accessible and available to these and all other stakeholders regardless
of their volume of purchases or sales, and that flexibility should be
maintained with respect to the amount of damages demonstrated when
filing a 340B ADR claim; therefore, HHS is finalizing this provision as
proposed without a minimum threshold for accessing the 340B ADR
process. As noted above, HHS recognizes that most disputes that occur
between individual parties are resolved in a timely manner without
HRSA's involvement. The 340B ADR process should be considered only when
good faith efforts to resolve disputes have been exhausted and failed.
Comment: The 2020 final rule established the 340B ADR process as
reliant on the Federal Rules of Civil Procedure (FRCP) and the Federal
Rules of Evidence (FRE). These rules govern civil proceedings and the
introduction of evidence at civil and criminal trials in Federal
courts. In the NPRM, HHS proposed removing reliance on these rules as
the statute does not compel reliance on the FRCP and FRE and many
covered entities lack the expertise in these legal rules as well as the
resources to hire outside counsel to navigate them. Conflicting
comments were received related to removal of reliance on the FRCP and
FRE for the 340B ADR process. Some covered entity stakeholders
appreciated the proposal to make the process more accessible and
administrative rather than trial-like. Most manufacturer commenters
raised concerns that HHS had not proposed an alternative procedural
framework or evidentiary standards in the absence of the Federal Rules
asserting that without standards, the ground rules would be subject to
dispute in each case.
Response: HHS believes the new 340B ADR process will be a more
accessible process, especially for covered entities with fewer
resources, and will not require legal expertise during the claim
resolution process. This approach will be more accessible to
stakeholders and will use fewer stakeholder and government resources to
resolve disputes. As such, this final rule sets up an accessible and
comprehensible process without needing to invoke the more elaborate
procedures available under the FRCP and FRE.
Comment: Some covered entity commenters approved of the proposal to
automatically transfer claims under the 2020 final rule to the new
process.
Other commenters disagreed that claims should be automatically
transferred to the new process. These commenters specifically argued
that HHS should proceed to handle the claims that are currently in the
queue under the 2020 final rule as opposed to automatically
transferring them to the new process. Further, one covered entity
commenter generally stated that it was unclear whether HHS would be
permitted under administrative law principles to transfer claims to the
new process. The commenter suggested that such a transfer would
conflict with the general principle that agencies must apply the law in
effect at the time a decision is made, even when that law has changed
during the course of a proceeding.
Most manufacturer commenters disagreed, arguing that all pending
ADR claims should be dismissed upon issuance of a final rule, and
claimants should be required to refile claims if they wished to
initiate new ADR proceedings.
Response: After consideration of the comments received, HHS is
finalizing this provision as proposed to provide for the automatic
transfer of any pending claims to the new process. The decision to
automatically transfer any
[[Page 28646]]
claims that were submitted pursuant to the 2020 final rule and that are
pending will minimize burden on all parties involved. For petitioners,
it will mean that they do not have to resubmit claims under the new
process. It will ensure the continuity of the 340B ADR process for the
stakeholders involved in claims under the 2020 final rule, despite the
new process as envisioned in this final rule.
In particular, we disagree that automatically transferring claims
to the new process will run afoul of any administrative law principles.
The general presumption that agencies apply the law in effect at the
time a decision was made is of no moment here, because nothing in this
final rule changes the substantive law governing disputes covered by
the 340B ADR process. Transferring pending claims to the new process
``takes away no substantive right but simply changes the tribunal that
is to hear the case''; in such a situation, ``[p]resent law normally
governs.'' Landgraf v. USI Film Prod., 511 U.S. 244, 274 (1994)
(cleaned up). As the Supreme Court has explained, a law ``govern[ing]
the transfer of an action instituted prior to that statute's
enactment'' may ``be applied in suits arising before their enactment
without raising concerns about retroactivity.'' Id. at 275. ``Because
rules of procedure regulate secondary rather than primary conduct, the
fact that a new procedural rule [is] instituted after the conduct
giving rise to the suit does not make application of the rule at trial
retroactive.'' Id.
This rule modifies procedural requirements for the 340B ADR
process. It does not impair any rights possessed by parties when they
acted, increase or affect their liability for past conduct, or impose
new duties on the parties for already completed transactions. The
changes in this final rule do not affect the substance of claims at
issue for the ADR panel and accordingly could not be considered to have
retroactive application that affects potential consequences understood
by the parties when they began the 340B ADR process.
Claims that are automatically transferred will be first in the
queue to be reviewed once this final rule becomes effective. Within a
specified time period, HHS will allow petitioners of claims submitted
under the 2020 final rule to submit additional information or revise
their petition, as necessary, in support of their original claim.
Petitioners will also be able to withdraw their pending claims. HRSA
will work with affected parties to the extent that additional
information is needed as part of the process outlined in this final
rule. Details concerning this automatic transfer of claims will be
provided to affected parties once this final rule becomes effective.
Comment: Many manufacturer commenters requested that HHS revise the
1996 manufacturer audit guidelines before it issues regulations on ADR.
They stated that the guidelines are problematic because they impose
onerous and unnecessary barriers on a manufacturer's ability to audit a
covered entity for 340B compliance.
Response: Revisions to the 1996 manufacturer audit guidelines are
outside the scope of this final rule. The requirement for a
manufacturer to conduct an audit prior to initiating the 340B ADR
process is a statutory requirement (section 340B(d)(3)(B)(iv) of the
PHS Act). This rule is not meant to address how a manufacturer should
conduct the audit--only that a manufacturer does conduct the audit
prior to initiating the ADR process. Multiple manufacturers have
utilized the 1996 manufacturer audit guidelines to conduct audits of
covered entities. In the last 5 years, six have followed the guidelines
to request audits of covered entities. During that same time frame,
HRSA has not denied a request for a manufacturer audit of a covered
entity, thereby, demonstrating the guidelines are not overly burdensome
or present any barriers to a manufacturer's ability to perform an audit
of a covered entity. Further, the guidelines present a clear and
transparent process that may decrease burden on both parties with open
dialogue and present an objective review of a covered entity's
compliance.
Comment: Several manufacturer commenters raised that HHS has failed
to establish procedures for manufacturers to issue refunds to covered
entities for overcharges. They explained that this is a prerequisite to
the 340B ADR process in order for it to be fair, efficient, and
expeditious. Relatedly, they stated that there is a need for HHS to
address refund procedures that permit offsets of covered entity
overpayments and underpayments to a manufacturer.
Response: Specific procedures for refunds are outside the scope of
this final rule, as the authority for this final rule directly relates
to the development of an administrative process for the resolution of
claims as described in section 340B(d)(3) of the PHS Act.
Subpart A--General Provisions
Section 10.3 Definitions
In the NPRM, HHS sought to add or revise the following definitions:
``Administrative Dispute Resolution Panel (340B ADR Panel),'' ``340B
Administrative Dispute Resolution Process,'' ``claim,'' ``consolidated
claim,'' ``joint claim,'' and ``Office of Pharmacy Affairs.'' HHS did
not receive substantive comments on this section, and we are finalizing
this section as proposed. HHS received numerous comments on defining
the types of claims that could be adjudicated through the 340B ADR
process, and HHS addresses those comments in Sec. 10.21.
Subpart C--Administrative Dispute Resolution
Section 10.20 340B Administrative Dispute Resolution Panel
(a) Members of the 340B ADR Panel
The 2020 final rule states that the Secretary shall establish a
340B ADR Board consisting of at least six members appointed by the
Secretary with equal numbers from HRSA, CMS, and the HHS OG C. It also
requires the HRSA Administrator to select three members from the ADR
Board to form a 340B ADR Panel and that each 340B ADR Panel include one
ex-officio, non-voting member (appointed by the Secretary) from OPA to
assist the 340B ADR Panel. HHS proposed to revise the composition of
the 340B ADR Panel that would review and make decisions for claims
filed by covered entities and manufacturers. In the NPRM, HHS proposed
that the Secretary appoint a roster of no fewer than 10 eligible
individuals (Roster) consisting of OPA staff to serve on the 340B ADR
Panels. Under the proposed rule, the OPA Director, or designee, selects
at least three members for each 340B ADR Panel from the Roster of
appointed staff; has the authority to remove an individual from the
340B ADR Panel and replace such individual; selects replacement members
should a 340B Panel member be removed or resign; and screens for any
potential conflicts of interests. After consideration of the comments
received, HHS is finalizing this provision as proposed. HHS has
addressed specific comments with respect to this section below.
Comment: Several covered entity commenters favored the proposal to
have OPA staff serve as the 340B ADR Panel members, because the staff
understand the intricacies of the 340B Program. They explained that the
340B Program is complex and it is important that individuals understand
the complexities of the 340B Program to adjudicate these disputes in
order to ensure a fair outcome. Some concerns were raised that the
workload may be too much for a small OPA staff, and that
[[Page 28647]]
an insufficient number of available panelists could lead to delayed
decisions. Some covered entity commenters who favored OPA staff serving
on 340B ADR Panels also recommended that other staff within HRSA could
serve on 340B ADR Panels, such as staff working on programs with
grantees that participate in the 340B Program.
Response: HHS agrees with the commenters that OPA staff should
serve on 340B ADR Panels given their specialized knowledge and
expertise of the 340B Program. Therefore, HHS is finalizing this
provision as proposed. HHS also appreciates the commenters' concerns
regarding the workload of OPA staff and the suggestion to include other
HRSA staff that work with grantees participating in the 340B Program.
However, as stated in the preamble of the proposed rule, OPA staff are
subject matter experts and have years of experience with complex 340B
matters involving covered entities and manufacturers. Given this
expertise, HHS continues to believe that OPA staff are best suited to
serve on 340B ADR Panels to ensure that the process is efficient and
that claim reviews are handled in a timely fashion. This final rule
limits 340B ADR Panel participation to OPA staff who have daily
exposure to the complex issues facing both covered entities and
manufacturers, to ensure there will be equitable, consistent, and fair
340B ADR adjudications. In addition, the OPA Director is aware of the
workload of each OPA staff member and will be able to appropriately
assign 340B ADR Panel members taking into consideration existing
workload demands and priorities.
Comment: Some manufacturer commenters opposed OPA staff serving on
340B ADR Panels. These commenters argued that all OPA staff are
involved in audits of covered entities and manufacturers, and with at
least 10 staff planned to be on the ADR Roster under the proposed rule,
there may be too many conflicts of interests and, in turn, the
possibility and perception of bias may arise. Moreover, manufacturers
opposing this policy were concerned that, given OPA's regular and
extensive involvement in the day-to-day administration of the 340B
Program, it may be difficult for OPA staff to approach adjudications
without the appearance that they may be predisposed to particular views
on relevant issues. Some commenters suggested Administrative Law Judges
be the adjudicators of the 340B ADR process because they have the
professional background, legal training and independence needed to
resolve claims in a fair, consistent, and well-reasoned manner.
Response: HHS continues to believe that a Panel of OPA staff
members who are steeped in 340B knowledge and experience and who can
provide a consistent application of 340B policies will ensure a more
efficient ADR adjudication process. As such, HHS is finalizing this
provision as proposed. OPA staff members work to provide oversight of
the 340B Program without bias--working with both manufacturers and
covered entities in a manner that is impartial to the stakeholders
involved. In addition, staff members work toward the goal of ensuring
the integrity of the 340B Program and they do so without prejudice
toward particular stakeholders. Those serving as 340B ADR Panel members
will be fair and make consistent decisions in a well-reasoned manner
using the 340B statute, applicable regulations, policies, and guidance
documents. OPA staff have demonstrated their ability to follow the
principles of fairness, consistency, transparency of applicable
statute, regulations, policies, and guidance in their performance of
covered entity and manufacturer audits. The breadth of experience,
which we believe far outweighs any risks of perceived bias, among the
OPA staff members serving on a 340B ADR Panel will ensure fairness,
consistency, and transparency in ADR decisions. In addition, the OPA
Director, in consultation with government ethics officials, will
consider financial interest(s), current or former business or
employment relationship(s), or other involvement of a prospective panel
member or close family member who is either employed by or otherwise
has a business relationship with an involved party, subsidiary of an
involved party, or particular claim(s) expected to be presented to the
prospective panel member.\1\
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\1\ ``Confidential Financial Disclosure Guide: OGE 450.'' U.S.
Office of Government Ethics. October 2023.
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In addition, specialized legal knowledge or training is not
necessary for 340B ADR Panel members to effectively function in their
role as the 340B ADR process is an administrative process that is best
served by having 340B subject matter experience rather than legal
experience. HHS disagrees with the recommendation that Administrative
Law Judges should be appointed as adjudicators of the 340B ADR process.
The 340B ADR process is different, as it is designed as a process
to resolve disputes between covered entities and manufacturers and in
this final rule, HHS is establishing 340B ADR Panels comprised of OPA
staff, who are uniquely suited to handle the complexities of the 340B
Program, given their day-to-day administration of the Program.
Processes are well established to provide staff opportunity for
continuous learning and training on program implementation and
oversight. OPA staff also have distinct knowledge of the 340B statute,
laws, and policies as they apply that subject matter expertise
throughout the work that is conducted on a daily basis to oversee the
program and therefore will be able to handle such disputes effectively
and efficiently.
Comment: Some manufacturer commenters argued that the new proposed
rule has the same Appointments Clause and structural constitutional
defects as the 2020 final rule. They stated that there is no mechanism
for review of a 340B ADR Panel decision by a principal officer,
appointed by the President with Senate confirmation, before that
decision becomes ``final agency decision.''
Response: HHS disagrees. Under this final rule, the Secretary will
appoint a roster of eligible individuals (Roster) consisting of staff
within OPA to serve on a 340B ADR Panel. When a 340B ADR claim is
presented, the OPA Director will select three members from the Roster
to serve on a 340B ADR Panel to review claims and make final agency
decisions that will be binding on the parties involved, unless
invalidated by an order of a Federal court. As discussed further in
Sec. 10.20(c), the Secretary, who is appointed by the President and
Senate-confirmed, has the authority to intervene in the 340B ADR
process at any time, including the ability to remove any individual
from the Roster of 340B ADR Panelists for any reason. The Secretary had
inherent authority to take these same actions under the 2020 final
rule, and the codified regulatory text now explicitly addresses this
authority. Specifically, as outlined further below, any 340B Panel
decision or reconsideration decision regarding a 340B ADR Panel's
decision will be effective 30 business days from issuance and serve as
the final agency decision unless within 30 business days of issuance,
the Secretary makes a determination that the Secretary will review the
decision.
(b) Conflicts of Interest
In the NPRM, HHS proposed that the OPA Director would ensure that
each 340B ADR Panel member is screened prior to reviewing a claim and
that there
[[Page 28648]]
are no conflicts of interest between the parties involved in the
dispute and the 340B ADR Panel member. The conflict-of-interest review
includes financial interest(s), current or former business or
employment relationship(s), or other involvement of a prospective panel
member or close family member who is either employed by or otherwise
has a business relationship with an involved party, subsidiary of an
involved party, or particular claim(s) expected to be presented to the
prospective panel member. Under the proposed rule, members of the 340B
ADR Panel will also undergo additional screening prior to reviewing a
specific claim to ensure that the 340B ADR Panel member was not
involved in the previous agency action, including previous 340B ADR
Panel decisions, concerning the specific issue in the claim. HHS
received several comments on this provision, which are summarized
below. After a review and analysis of the comments, HHS is clarifying
the additional conflict of interest screening as discussed in more
detail below.
Comment: Both manufacturer and covered entity commenters agreed
that HHS should evaluate conflicts of interest with regard to a 340B
ADR Panel member; however, they recommended that the parties should
have the ability to make objections to a proposed panelist. Some
commenters mentioned the small size of the OPA staff may make having
too broad of screening for conflict of interest, such as having worked
on an audit, difficult to fill a panel with subject matter experts.
Commenters also requested the policies and procedures for screening
panel members be publicly outlined.
Response: HHS will inform the parties involved in the ADR of Panel
members for that specific claim. The OPA Director has full knowledge of
a Panel member's workload and will select Panel members for each claim,
which will also be based on the OPA Director's awareness of any
potential conflicts of an OPA staff member, including financial
interest conflicts, current or former business relationships or other
involvement. We believe that the process sufficiently addresses the
need to screen for conflicts and allowing the parties to object to
proposed panelists or the specific policies or procedures for screening
panel members would unduly lengthen the 340B ADR process. To the extent
a conflict arises regarding an assigned panelist, the OPA Director is
authorized to make changes to the panel composition. The commenters
also raised concern about whether the additional conflict of interest
screenings would make it difficult to fill 340B ADR Panel positions,
given the small staff within OPA. In order to make this process fair,
efficient and transparent, HHS is retaining the policy that a conflict
of interest screening will be conducted on all 340B ADR Panel members
to ensure there is no conflict of interest with respect to financial
conflicts or current/former business relationships or other involvement
of a prospective panel member or close family member who is either
employed by or otherwise has a business relationship with an involved
party, subsidiary of an involved party in an 340B ADR claim. However,
based on the comments received, HHS is clarifying that the additional
screening in Sec. 10.20(b)(2) will be conducted to ensure that a 340B
ADR Panel member was not directly involved in a decision concerning the
specific issue of the ADR claim as it relates to the specific covered
entity or manufacturer involved, including previous 340B ADR Panel
decisions. This clarification responds to the concerns of the
commenters and balances the fact that 340B ADR Panel members will be
selected from a relatively small staff. Indirect or tangential
involvement in matters affecting a specific covered entity or
manufacturer will not be considered a conflict of interest.
To the extent that any significant conflict issue is raised outside
of those specifically addressed in Sec. 10.20(b), the OPA Director or
the Secretary still have the discretion to remove a 340B ADR Panel
member (as addressed in Sec. 10.20(a) and (c) of this final rule,
respectively).
(c) Secretarial Removal Power
The NPRM proposed to codify in regulatory text the Secretary's
authority to remove any individual from the Roster of 340B ADR
Panelists for any reason, including from any 340B ADR Panel to which
the individual has already been assigned. After a review of the
comments received, HHS is modifying this provision by clarifying the
Secretary's role in the 340B ADR process.
To respond to commenter requests for transparency, HHS commits to
publishing these policies and procedures for screening panel members on
a HRSA public-facing website within 120 calendar days of the
publication of this final rule and, likewise, in the event that these
policies and procedures are modified, HHS commits to publishing these
policies and procedures for screening panel members on a HRSA public-
facing website within 120 calendar days of such modification.
Comment: Many manufacturers argued that while the preamble to the
proposed rule suggests that the Secretary would have the inherent
authority to review and reverse or alter the 340B ADR Panel's decision,
it was not explicitly included in the proposed regulatory text.
Further, they stated that the Secretary does not exercise sufficient
control over ADR panelist decisions.
Response: There are no restrictions on the Secretary's oversight or
supervision over the 340B ADR process. The Secretary has the authority
to intervene in the 340B ADR process at any time, has the authority to
remove Panel members from the Roster, and has the authority to review,
reverse, or alter any decision made by the 340B ADR Panel or any
reconsideration decision made by the HRSA Administrator as outlined in
Sec. 10.24. In consideration of the comments received, HHS is
modifying this provision to make explicit that the Secretary has the
authority to review, alter, reverse, or uphold any 340B ADR Panel or
reconsideration decision. Specifically, as outlined further below, any
340B Panel decision or reconsideration decision regarding a 340B ADR
Panel's decision will be effective 30 business days from issuance and
serve as the final agency decision unless within 30 business days of
issuance, the Secretary makes a determination that the Secretary will
review the decision. If the Secretary reviews and reverses, alters, or
upholds any 340B ADR Panel or reconsideration decision, the Secretary's
decision will serve as the final agency decision and will be binding
upon the parties involved in the dispute, unless invalidated by an
order of a Federal court.
(d) Duties of the 340B ADR Panel
The proposed rule outlined the duties of the 340B ADR Panel, which
included:
(1) reviewing and evaluating claims, including consolidated and
joint claims, and documents and information submitted by covered
entities and manufacturers;
(2) reviewing and possibly requesting additional documentation,
information, or clarification of an issue from any or all parties to
make a decision;
(3) evaluating claims based on information received, unless, at the
340B ADR Panel's discretion, the nature of the claim necessitates that
a meeting with the parties be held;
(4) consulting with other Federal agencies while reviewing the
claim, at the 340B ADR Panel's discretion; and
(5) making decisions on each claim.
[[Page 28649]]
There were no substantial comments received on this provision;
therefore, HHS is finalizing the provision as proposed.
Section 10.21 Claims
(a) Claims Permitted
In accordance with section 340B(d)(3) of the PHS Act, 340B ADR
claims may include: (1) claims by a covered entity that it has been
overcharged by a manufacturer for a covered outpatient drug; and (2)
claims by a manufacturer, after it has conducted an audit of a covered
entity pursuant to section 340B(a)(5)(C) of the PHS Act, that the
covered entity has violated section 340B(a)(5)(A) of the PHS Act,
regarding the prohibition of duplicate discounts, or section
340B(a)(5)(B) of the PHS Act, regarding the prohibition of the resale
or transfer of covered outpatient drugs to a person who is not a
patient of the covered entity. The NPRM proposed that all claims must
be specific to the parties identified in the claims. Based on the
comments received, HHS is finalizing this provision as proposed. HHS
has also decided to provide an illustrative but not exhaustive list of
examples of the types of overcharges, diversion, and duplicate discount
claims that may be eligible for the 340B ADR process.
Comment: Several covered entity commenters argued that
manufacturers should not be allowed to bring claims related to a
covered entity's eligibility and suggested that manufacturers cannot
pursue claims alleging Medicaid managed care duplicate discount
violations. These commenters believe that these types of claims are
outside those permitted under the ADR statute.
Response: Generally, HHS agrees with the exclusion of claims
regarding covered entity eligibility but disagrees with the commenters
on claims related to duplicate discounts in Medicaid managed care. This
final rule aligns claims to those expressly set forth in section
340B(d)(3) of the PHS Act: (1) claims by covered entities that they
have been overcharged by manufacturers for drugs purchased under this
section and (2) claims by manufacturers, after a manufacturer has
conducted an audit of a covered entity, as authorized by section
340B(a)(5)(C) of the PHS Act, that a covered entity has violated the
prohibitions against duplicate discounts and diversion (sections
340B(a)(5)(A) and (B) of the PHS Act). As duplicate discounts can occur
with drugs subject to rebates under both Medicaid fee-for-service and
Medicaid managed care, HHS declines to exclude Medicaid managed care
claims from the 340B ADR process. In addition, although the eligibility
of a covered entity is generally outside of the scope of the 340B ADR
process; if resolution of a diversion claim depends in whole or in part
on whether a claimant is an eligible covered entity, then that claim
may proceed through the 340B ADR process, given that the 340B statute
permits claims for overcharges, diversion, and duplicate discounts. In
this final rule, the role of the 340B ADR Panel is to independently
review and apply the 340B statute and applicable regulations, policies,
and guidance documents to the case-specific factual circumstances at
issue in an overcharge, diversion, or duplicate discount dispute.
Comment: Some covered entity commenters urged HHS to reinstate
language from the 2020 final rule to make clear that covered entities
may bring an overcharge claim in situations in which a manufacturer has
limited the covered entity's ability to purchase a covered outpatient
drug at or below the 340B ceiling price.
Response: HHS agrees and has modified Sec. 10.21(a)(1) to further
explain that an overcharge claim generally includes claims that a
manufacturer has limited the covered entity's ability to purchase
covered outpatient drugs at or below the 340B ceiling price.
Comment: Some covered entity commenters recommended that the final
rule include a definition for the term ``overcharge,'' to mean an
attempt to collect a price in excess of the 340B price for a covered
outpatient drug, any attempt to cause a drug wholesaler to decline to
offer 340B pricing on a covered outpatient drug to a covered entity,
and any refusal by a manufacturer to sell a covered outpatient drug at
340B pricing.
Response: When an overcharge claim is presented before a 340B ADR
Panel, the Panel will follow the 340B statute, relevant case law, all
applicable regulations, and consider 340B policies and guidance
documents when evaluating 340B ADR claims. One example of an overcharge
claim in the 340B ADR process would be a claim that a manufacturer has
limited the covered entity's ability to purchase covered outpatient
drugs at or below the 340B ceiling price or the manufacturer does not
offer the 340B ceiling price. We do not believe that an explicit
definition of the term ``overcharge'' is needed in light of the process
discussed above for addressing an overcharge claim.
Comment: Many manufacturer commenters objected to the lack of an
explicit definition in the proposal for the terms ``patient'' or
``diversion.'' They explained that covered entities are prohibited from
selling or otherwise transferring drugs purchased under the 340B
Program to a person who is not a patient of the entity in accordance
with section 340B(a)(5)(B) of the PHS Act. These commenters believe
that HRSA should revise and clarify its current guidance (61 FR 55156
(Oct. 24, 1996)), to strengthen administration of the 340B Program,
including the 340B ADR process and the parties' ability to work
together to resolve disputes in good faith as proposed in Sec.
10.21(b).
Response: Revision of the 1996 patient definition guidance is
outside the scope of this rule. When a diversion claim is presented
before a 340B ADR Panel, the Panel will follow the 340B statute and all
applicable regulations, and consider 340B policies and guidance
documents when evaluating 340B ADR claims. Examples of a diversion
claim that may be submitted (after a manufacturer has conducted an
audit of a covered entity), include but are not limited to: (1)
transferring of covered outpatient drugs to a patient where there was
no record of the individual's health care or no provider relationship
or (2) transferring covered outpatient drugs to an individual who is an
inpatient. Similarly, examples of a duplicate discount claim include
but are not limited to: (1) if it is found after an audit of a covered
entity that the covered entity billed Medicaid without the site being
listed on the Medicaid Exclusion File and the manufacturer paid a State
rebate or (2) if it is found after an audit of a covered entity that
the manufacturer paid a State rebate and the covered entity had
incomplete or inaccurate information on the Medicaid Exclusion File.
(b) Requirements for Filing a Claim
As proposed in the NPRM, a covered entity or manufacturer must file
a 340B ADR claim in writing to OPA within 3 years of the date of the
alleged violation. HHS also proposed that any file, document, or record
associated with the claim that is the subject of a dispute must be
maintained by the covered entity and manufacturer until the date of the
final agency decision. Before filing a claim, each stakeholder must
provide appropriate documentation, including documentation of
communication with the opposing party to resolve the matter in good
faith. In the case of a covered entity, the covered entity must provide
documentation to support that it has been overcharged by a
manufacturer, in addition to any other documentation requested by OPA.
Covered entities are not permitted to file a claim against multiple
manufacturers.
[[Page 28650]]
A manufacturer must provide documents that show it audited the covered
entity and that are sufficient to support its claim that a covered
entity has violated the prohibition on diversion and/or duplicate
discounts, in addition to any other documentation as may be requested
by OPA. HHS received several comments on these provisions and
considered them carefully. For the reasons detailed below, HHS is
finalizing these provisions as proposed.
Comment: Some covered entities commenters requested clarification
that the 3-year records limitation period begins on the date of sale or
payment at issue except when the manufacturer issues a restatement of
the average manufacturer price (AMP), best price, customary prompt pay
discounts, nominal prices, or other data that affects the 340B ceiling
prices. Some of these commenters recommended that HHS include an undue
hardship exemption to the 3-year limitation on claims to benefit small
rural covered entities. They explain that small rural providers may
submit ADR claims without outside counsel. Further, they state that
alongside other challenges that a covered entity could be facing,
pulling together the needed documentation to file a claim could be
burdensome for covered entities.
Some manufacturer commenters expressed that because of the
manufacturer audit requirement, which may take significant time to
complete, the final rule should ``toll'' the 3-year period for
manufacturer ADR claims from the point when a manufacturer first seeks
to conduct an audit until the audit concludes with the completion of
the audit report.
Response: While HHS believes that the 3-year limit is sufficient,
there may be times when the initial reviewer will account for
extenuating circumstances. For example, the timeline for manufacturer
audits of covered entities depends on a variety factors, which may
affect when they are finalized. Another example is when data affecting
the 340B ceiling price are revised, such as where AMP or best price are
corrected or restated, an alleged violation would have not occurred
until the data were revised. These examples are not exhaustive but
illustrate situations that may warrant flexibilities. In addition,
under the current ADR process, the 3-year time period has proved to be
sufficient for the parties. Noting these flexibilities, HHS is
finalizing the provision as proposed.
Comment: Most commenters were generally supportive of the proposal
that documentation of ``good faith'' efforts is required before a party
can initiate a claim through the 340B ADR process. However, some
manufacturer commenters believe that HHS should specify the types of
documents required to evidence ``good faith'', including, but not
limited to, documentation demonstrating that the covered entity has
contacted the manufacturer about the potential issue and has given the
manufacturer sufficient notice of a potential claim before initiating
340B ADR process.
Some covered entity commenters recommend that HHS remove the ``good
faith'' requirement before filing a claim. Specifically, they argue
that the act of overcharging a covered entity could not be an act of
good faith and engaging with the manufacturer would be futile and cause
unnecessary delay. These commenters argue that a ``good faith effort''
prerequisite to filing a claim requires the agency to make difficult
determinations regarding whether an attempt at resolution was made in
``good faith.''
Response: After consideration of the comments received, HHS is
finalizing this provision as proposed. Given the resources required to
pursue an ADR claim, HHS encourages covered entities and manufacturers
to work in good faith to resolve disputes. Good faith attempts include
for example, at least one instance of written documentation
demonstrating that the initiating party has made attempts to contact
the opposing party regarding the specific issues cited in the ADR
claim. The requirement to engage in good faith efforts may resolve
disputes before the need to file a petition in many cases. In addition,
HHS has historically encouraged manufacturers and covered entities to
work with each other to attempt to resolve disputes in good faith, and
most disputes have been resolved in a timely manner without needing
HRSA's involvement. Also, the 340B ADR process is not intended to
replace these good faith efforts and should be considered only when
good faith efforts to resolve disputes have been exhausted and failed.
Good faith efforts and documentation can include communication
between parties to obtain clarifications or to provide explanations
that may not be readily apparent and may provide perspective to either
party that may help mitigate concerns. For example, HRSA currently has
a process in place when a covered entity is unable to obtain a 340B
price from a manufacturer. In this case, HRSA can facilitate good faith
efforts between the parties, and oftentimes help them resolve disputes,
which typically are as a result of an error or misunderstanding.
Comment: Some manufacturer commenters encouraged HHS to protect the
proprietary and confidential components of all parties' information
throughout the 340B ADR process. They explained that for the 340B ADR
process to work efficiently, parties need assurances that the
proprietary and confidential information that they disclose will not be
made publicly available.
Response: HHS will work to protect the proprietary and confidential
information of the parties to the maximum extent that it is able to
pursuant to current law.
(c) Combining Claims
The NPRM proposed that two or more covered entities may jointly
file claims of overcharges by the same manufacturer for the same drug.
The NPRM also provided that an association or organization may file on
behalf of one or more covered entities representing their interests
pertaining to overcharging by a single manufacturer for the same
drug(s). The proposed rule provided specific parameters for covered
entities filing joint claims and for associations/organizations filing
claims on behalf of one or more covered entities, including that each
covered entity meets the requirements for filing the ADR claim and that
there is documentation of each covered entity's consent.
The NPRM also proposes that a manufacturer or manufacturers may
request to consolidate claims brought by more than one manufacturer
against the same covered entity if each manufacturer could individually
file a claim against the covered entity, consents to the consolidated
claim, meets the requirements for filing a claim, and the 340B ADR
Panel determines that such consolidation is appropriate and consistent
with the goals of fairness and economy of resources. The statutory
authority for implementing the 340B ADR process does not address
consolidated claims on behalf of manufacturers by associations or
organizations representing their interests. After a careful review and
consideration of the comments received, HHS is finalizing this
provision as proposed.
Comment: Many covered entities commenters indicated that the NPRM
improperly limits claims brought by associations and organizations
representing covered entities to only those covered entities that
consent to the claim being asserted on their behalf. These commenters
argued that the
[[Page 28651]]
criteria for inclusion in an organizational claim in the 340B statute
is merely membership in the organization. Representation by
associations, regardless of whether the entity consents, allows covered
entities to access the process more easily. They argued that requiring
consent from each member of an organization introduces unnecessary
resource and time burden--and could significantly delay the filing of
claims that are sometimes time sensitive.
Response: An ADR claim could substantively affect a covered
entity's ability to recover for 340B overcharges, as well as a covered
entity's relationship with a manufacturer. However, after consideration
of the comments, HHS, will permit associations or organizations filing
a claim on behalf of its members to submit an attestation, rather than
submitting signatures from each individual covered entity, that they
have confirmed that all of the individual covered entities have agreed
to be part of the ADR claim.
As part of the initial review of the claim, OPA will review the
attestation statement submitted by the organization or association. If
attestation documentation is missing, OPA will follow-up to obtain the
attestation.
Comment: A few manufacturer commenters requested that HHS prohibit
covered entities or manufacturers from asserting any individual claim
that overlaps with a consolidated claim or joint claim. Commenters also
urged HHS to clarify that the requirement for a joint claim by covered
entities must involve the ``same drug or drugs,'' which would mean that
the alleged overcharges must involve substantially the same national
drug code (NDC) and quarters.
Response: As part of the initial claim review, OPA will evaluate
whether an individual claim would overlap with a consolidated claim or
joint claim. If an overlap exists, OPA will contact the parties
involved and request that they resolve the discrepancy. In addition,
the review will also ensure that the alleged overcharge involves the
same NDCs for joint claims.
Comment: Several manufacturer commenters argued that HHS should
recognize manufacturers' ability to pursue claims through a trade
association or agent of their choice. The statute required HHS to allow
the combining of claims and permit claims to be brought on behalf of
covered entities by associations or organizations--however, commenters
assert that the statute does not preclude HHS from extending this
ability to manufacturers. Commenters also argued that few manufacturers
will utilize the 340B ADR process due to the onerous requirements of
the 2020 final rule and the audit requirement placed on them. They
explained that this requirement would further preclude manufacturers
from accessing the 340B ADR process by requiring them to wait several
years for each manufacturer to audit a covered entity before bringing a
consolidated claim.
Response: Section 340B(d)(3)(B) of the PHS Act permits associations
to file joint ADR claims on behalf of covered entities; however, it
does not include similar language for associations to file consolidated
claims filed on behalf of manufacturers. In addition, due to the
requirement that a manufacturer must first audit a covered entity
before submitting an ADR claim, it would be difficult to have each
manufacturer of the association or organization conduct an audit of a
covered entity before filing a claim. Therefore, HHS is finalizing this
provision as proposed. Regarding the commenter's argument about the
audit requirements, HHS does not have the authority to waive this
statutory requirement. Section 340B(d)(3)(B)(iv) of the PHSA requires
that a manufacturer conduct an audit of a covered entity pursuant to
subsection (a)(5)(C) as a prerequisite to initiating the 340B ADR
process against a covered entity.
(d) Deadlines and Procedures for Filing a Claim
The proposed rule set forth the deadlines and procedures for filing
a claim, including that OPA would conduct an initial review to
determine whether the claim meets certain requirements as set forth by
the statute and regulations. HHS proposed that OPA staff reviewing the
initial claim review may not be appointed to serve on the 340B ADR
Panel reviewing the specific claim. Additionally, under the proposed
rule, OPA could request additional information of the initiating party
and the party would have 20 business days from the receipt of the
request to respond and if the party does not respond (or request and
receive an extension to respond during that time period), the claim
would not move forward to the 340B ADR Panel for review. The proposed
rule also indicates that a written response would be sent to the
initiating party once the claim is complete and OPA would send that
verification of completion to the opposing party with instructions
regarding the 340B ADR process, including timelines and information on
how to submit their response as outlined in Sec. 10.21(e). Once OPA
receives the opposing party's response, OPA would notify both parties,
either advising that the claim would move forward for the 340B ADR
Panel for review or that OPA determined the claim did not meet the
requirements as set forth in Sec. 10.21(b) and the reasons why. HHS
proposed that for any claim that did not proceed to review by the 340B
ADR Panel, the claim could be revised and refiled if there were new
information to support the alleged statutory violation and the claim
meets the criteria set forth in the statute and the regulation. HHS
received several comments related to this provision and is finalizing
this provision as proposed.
Comment: Several commenters suggested that HHS clarify that OPA's
initial review of the claim is limited to determining whether the claim
meets all the information requirements to file a claim and does not
involve a factual or legal review of the claim. They state that at this
stage, OPA should only be requesting additional information to satisfy
the filing requirements. The determination as to whether a claim is
substantiated should be reserved exclusively for the 340B ADR Panel.
Response: During the initial claim review, OPA will review a claim
only for completeness, and not make any determinations whether a claim
is substantiated. That determination will be reserved for the 340B ADR
Panel.
(e) Responding to a Submitted Claim
When responding to a submitted claim, the NPRM proposed that the
opposing party would have 30 business days to submit a written response
to OPA upon receipt of notification that the claim is deemed complete.
The proposed rule indicated that the opposing party may request an
extension of the initial 30 business days to respond. Once the opposing
party's response is received, OPA would provide a copy to the
initiating party as indicated in Sec. 10.21(d). The proposed rule also
explained that if the opposing party's response was not received or the
party elects not to participate in the 340B ADR process, OPA would
notify both parties that the claim has proceeded to 340B ADR Panel
review, and the 340B ADR Panel will render its decision after review of
the information submitted in the claim. HHS carefully considered the
comments received, which are summarized below, and is finalizing the
provision as proposed.
Comment: Some commenters suggested that HHS adopt a timeframe of 60
calendar days (with the possibility of extensions) for opposing parties
to respond to claims. These commenters are concerned with the proposal
to
[[Page 28652]]
allow 340B ADR Panels to draw an adverse inference if the opposing
party does not respond. They argued the proposed rule does not contain
any standard that would ensure that adverse inferences are drawn
against a party only in narrow circumstances. Finally, commenters noted
that the final rule should recognize that an ``adverse inference'' is
an extraordinary sanction, and there should be clear standards for when
such a sanction is appropriate.
Response: HHS is revising this rule to remove references to adverse
inferences, but otherwise finalizing this rule as proposed. Consistent
with the statutory goals of efficiency, fairness and timeliness, we
believe a response in 30 days is an adequate amount of time. However,
HHS recognizes that there may be instances that require time beyond the
stated deadlines, such as availability of key personnel. Depending on
the circumstances presented, the 340B ADR Panel may exercise its
discretion in granting additional time if warranted.
In addition, if a non-responsive party fails to respond before the
deadline, the 340B ADR Panel will render its decision based on the
information available to it during the adjudication process. If a party
chooses not to respond, the 340B ADR Panel will move forward with its
decision and there is a possibility that the decision may not be in
favor of the non-responsive party.
Section 10.22 Covered Entity Information and Document Requests
Under the proposed rule and in accordance with section
340B(d)(3)(B)(iii) of the PHS Act, covered entities may discover or
obtain information and documents from manufacturers and third parties
relevant to a claim that the covered entity has been overcharged by a
manufacturer. The NPRM proposed that the covered entity submit a
written request within 20 business days of the receipt from OPA that
the claim was forwarded to the 340B ADR Panel for review. The NPRM
proposed that such covered entity document requests be facilitated by
the 340B ADR Panel, including a review of the information/document
request and notifying the covered entity if the request is not
reasonable, not relevant or beyond the scope of the claim, and would
permit the covered entity to resubmit a revised request if necessary.
The manufacturer (and any affiliated third-party agents of the
manufacturer--wholesalers or other third parties) must respond to the
request within 20 business days of receiving the request. The
manufacturer must fully respond, in writing, to an information/document
request from the 340B ADR Panel by the response deadline. An extension
will be granted by notifying the 340B ADR Panel in writing within 15
business days of receipt of the request. The NPRM proposed that if a
manufacturer fails to fully respond to an information request, the 340B
ADR Panel shall draw an adverse inference and proceed with the facts
that the 340B ADR Panel has determined have been established in the
proceeding.
Many commenters recommended changes to the proposed provision
allowing parties to request and receive information during the 340B ADR
process, including allowing a manufacturer to submit an information
request--which was not contemplated by the statute. HHS carefully
reviewed the comments received, which are summarized below, and is
finalizing this provision as proposed.
Comment: Commenters argued HHS should establish a process for
manufacturers to directly request additional information from covered
entities during an ADR proceeding. These commenters requested that HHS
extend the timeframe for manufacturers to respond to additional
information and document requests from 20 business days to 60 calendar
days (with the possibility of reasonable extensions).
Response: Section 340B(d)(3)(B)(iii) of the PHS Act requires a
process whereby a covered entity may discover or obtain information and
documents from manufacturers and third parties relevant to a claim that
the covered entity has been overcharged by a manufacturer. The statute
does not have a similar provision for manufacturers and manufacturers
have the ability to gather needed information through the audits they
are required to conduct prior to filing ADR claims. As such, the
provision will be finalized as proposed.
In addition, HHS believes a response from manufacturers for
additional information and document requests in 20 business days is an
adequate amount of time. Any such additional time will unduly delay the
340B ADR process and run counter to the goals of fairness, efficiency,
and timeliness. This final rule also contains a provision through which
manufacturers may request an extension of this deadline.
Section 10.23 340B ADR Panel Decision Process
Aligned with section 340B(d)(3)(B)(ii) of the PHS Act, HHS has
sought to ensure that the 340B ADR decision process would ensure that
its review and decision of the claim is conducted in a fair, efficient,
and expeditious manner. HHS proposed that the 340B ADR Panel would
conduct an initial review of the claim to determine if the specific
issue that would be brought forth in a claim is the same as or similar
to an issue that is pending in Federal court. If this determination is
made, the 340B ADR Panel would suspend review of the claim until such
time as the issue is no longer pending in Federal court. If no such
issue exists, the proposed rule explained that the 340B ADR Panel would
review the documents submitted by the parties and determine if there is
adequate support to conclude that an overcharge, diversion, or a
duplicate discount has occurred in the specific case at issue. As
discussed in more detail below and after consideration of the comments
received on this proposal, HHS is removing this proposed provision from
this final rule to allow claims on issues pending in Federal court to
proceed through the 340B ADR process.
In addition, the NPRM proposed that the 340B ADR Panel would
prepare a decision that would represent the determination of a majority
of the 340B ADR Panel members' findings and include an explanation
regarding each finding. Once the letter has been transmitted to the OPA
Director and the parties involved, either party may request that the
HRSA Administrator reconsider the 340B ADR Panel decision or the HRSA
Administrator may decide to initiate a reconsideration without such a
request as outlined in Sec. 10.24. Under the NPRM, after 20 business
days of the issuance of the 340B ADR Panel decision, there is no
request for reconsideration from either party and the HRSA
Administrator has not initiated a reconsideration, the 340B ADR Panel's
decision letter will serve as the final agency decision and will be
binding upon the parties involved in the dispute, unless invalidated by
an order of a Federal court. The NPRM proposed that the OPA Director
would then determine any necessary corrective action or consider
whether to take enforcement action, and the form of that action, based
on the final agency decision. Based on comments received and as
discussed in detail below, HHS is modifying this proposal in this final
rule by including a timeframe by which the 340B ADR Panel decisions
will be issued to ensure that 340B ADR claims are resolved in a timely
manner. Finally, HHS will address the OPA Director's role in making
determinations for corrective action in future guidance and other
clarifications as discussed below.
Comment: The NPRM proposed that if the ADR Panel determines that a
specific issue in a claim is the same as,
[[Page 28653]]
or similar to an issue pending in Federal court, the ADR Panel would
suspend review of the claim until such time the issue is no longer
pending in Federal court. The NPRM expressly solicited comments from
stakeholders on this issue and HHS received significant comments. Some
commenters favor suspending claims until they are resolved in Federal
court as it would limit the risk of using limited ADR resources on
complex legal questions that would also be considered by the courts.
Without a suspension of claims, they argue there could be a risk that
the ADR Panel decision would be superseded by a Federal court ruling.
In contrast, other commenters strongly oppose the proposal and
argue why the provision should not be finalized. In general, the
commenters raised the following arguments:
<bullet> Commenters opposing the policy expressed that an issue
relevant to an ADR proceeding may be pending in several district courts
and the court decisions may diverge and not achieve a final consistent
resolution on the issue. They stated it is unclear how an ADR Panel
would decide after the rulings and whether the ruling would be based on
the outcome of the Federal court decision, and if so, which court
decision would control in the case of conflicts.
<bullet> Commenters also argued that Congress created the 340B ADR
process since covered entities have limited options for bringing legal
claims against manufacturers. They asserted that suspending claims is a
divergence from the statute, as the statute vests the ADR Panel with
authority to issue final agency decisions that are binding on the
parties involved through adjudication of 340B disputes. They argued
that the provision violates the 340B statute and the Administrative
Procedure Act (APA) as it prevents the 340B ADR Panel from resolving a
claim for an indefinite period of time based solely on the
determination that a Federal lawsuit is addressing an issue that is the
same or similar to the one included in an ADR claim.
<bullet> Commenters also expressed that the NPRM did not include
rules that would govern the 340B ADR Panel's determination that it
would not review a claim nor is there any mechanism for a covered
entity or manufacturer to contest a 340B ADR Panel's determination to
suspend review.
<bullet> Commenters cited the 2011 U.S. Supreme Court ruling in
Astra (Astra USA, Inc. v. Santa Clara County, 563 U.S. 110 (2011)) that
determined that covered entities do not have a cause of action to sue
manufacturers for 340B violations, but noted that covered entities do
have the option of pursuing recourse through the 340B ADR process.
<bullet> Finally, commenters opposing the policy explain that the
suspension of the 340B ADR Panel review may lead a 340B ADR Panel to
defer to a Federal court's decision on a 340B compliance issue, thereby
abrogating the 340B ADR Panel's duty to interpret 340B statutory
requirements. These commenters stated that this is contradictory to the
role of the 340B ADR Panel envisioned by the NPRM, which is to
independently review and apply 340B law and policy to the case-specific
factual circumstances at issue.
Response: After review of the comments received, HHS is removing
the provision at Sec. 10.23 in the NPRM that would suspend review of
ADR claims if the issue is the same as or similar to an issue that is
pending in Federal court. By allowing claims that are the same as or
similar to those pending in Federal court to move through the 340B ADR
process, HHS is proceeding consistent with the Astra decision and
meeting its statutory mandate to establish and implement a 340B ADR
process including the establishment of such deadlines and procedures to
ensure that claims involving certain 340B disputes are resolved fairly,
efficiently, and expeditiously. Therefore, this final rule will remove
the proposed Sec. 10.23(a) and revise Sec. 10.23(b) to allow for a
claim to proceed through the 340B ADR process, regardless of whether it
is the same as or similar to one that is pending in Federal court.
Comment: Many commenters argued that HHS should impose a timeframe
for ADR Panel decisions to ensure that 340B ADR claims are resolved in
a timely manner. Some suggested 45, 90, 120, or 180 days. Some
explained that 120 days is longer than the 90-day timeframe that
Medicare administrative law judges are subject to for Medicare claims
appeals and would be a sufficient amount of time. Commenters assert
that HHS should clarify that if an ADR panel has not issued a decision
within 120 days, a claimant should be able to bypass the 340B ADR
process and proceed to Federal court. Most commenters agreed that the
decision should be rendered no later than within one year.
Response: Based on the comments received, HHS is clarifying that
the expectation is that the 340B ADR Panel will make a decision on a
claim within one year of receiving the claim for review. However, HHS
recognizes that this general timeframe may not be suitable in every
situation, as there may be complexities that warrant additional time
beyond the one year timeframe. Additional time may be necessary, for
example, if a claim is submitted and the 340B ADR Panel requires
additional material, must determine whether there are overlapping
claims, must determine whether a covered entity consented to an
organizational claim, or seeks to consult with, as appropriate or
necessary, other staff within OPA, other HHS offices, other Federal
agencies, or with outside parties. Depending on the complexity of the
issue, this timeframe may exceed the one year timeframe set forth in
this final rule.
HHS does not believe it possible to list out every possible
exception in this final rule as there may be situations that are beyond
the control of the 340B ADR Panel and cannot be anticipated or
predicted in this final rule; however, these examples serve to
illustrate circumstances when it may take longer than one year for a
340B ADR Panel to render a decision. In any event, HHS does not believe
that many claims that are submitted under this final rule will take
longer than a year to resolve. As such, HHS is clarifying that the
expectation is the 340B ADR Panel decisions will be issued within a one
year time period; however, the 340B ADR Panel will inform the parties,
no later than 1 year from the date a claim is deemed complete, if the
forthcoming decision will exceed that one year timeframe and provide an
explanation as to why the decision on the claim will exceed one year.
Comment: Many commenters requested there be the option for an in-
person hearing before the 340B ADR Panel, if requested by either party.
The commenters explain that ADR claims may often involve factual
questions and the 340B ADR Panel may benefit from the ``adversarial
input'' of the parties involved.
Response: The NPRM did not contemplate in-person hearings as part
of the 340B ADR process, as HHS proposed a process that would be more
accessible than the 2020 final rule, by making it more expeditious and
less trial-like for all parties to resolve disputes. HHS believes
adding in-person hearings to the process could be arduous, could create
disadvantages to under-resourced parties, and could create unnecessary
delays. For example, smaller or rural covered entities, including those
with limited resources, could have significant difficulties complying
with such a requirement compared to larger and better resourced
parties.
Comment: Some commenters appreciated HHS' proposed removal of
[[Page 28654]]
language indicating that 340B ADR Panel decisions are precedential.
They argued that the 2020 final rule gave the 340B ADR Panel the
ability to set and change policy on fundamental program issues, such as
who qualifies as a 340B-eligbile patient--and they argued that such
language was inconsistent with the 340B statute, which does not support
making 340B ADR Panel decisions precedential.
Conversely, other commenters disagreed and believed that ADR
decisions should be precedential because, otherwise, it would be
difficult to adequately assess the viability of a claim prior to
submitting it to the 340B ADR Panel. They explained that by ensuring
that decisions are precedential, it would impact how well entities are
able to evaluate whether the 340B ADR process is appropriate for a
given claim based on the time and resource investment required of the
parties involved.
Response: Section 340B(d)(3)(C) of the PHS Act states that the
administrative resolution of a claim shall constitute final agency
decision and will be binding on the parties involved, unless
invalidated by an order of a court of competent jurisdiction. The 340B
statute does not expressly state that the 340B ADR Panel decision or a
subsequent reconsideration decision be precedential. As set forth in
Sec. Sec. 10.21 and 10.23, the 340B ADR Panel will follow the 340B
statute, regulations, and all policies governing the 340B Program when
reviewing and evaluating 340B ADR claims and HHS is finalizing as
proposed.
Comment: Most commenters urged wider transparency and requested
that HHS publish 340B ADR Panel decisions on HRSA's website and require
340B ADR Panel decisions to include the 340B ADR Panel's factual and
legal conclusions, including the HRSA policy on which the decision is
based. They reasoned that this would ensure ADR decisions are
consistent with current 340B policies and that 340B stakeholders are
able to understand and apply HRSA's rule and compliance expectations.
Response: HHS values and supports transparency in the outcome of
any 340B ADR Panel decision. For HRSA audits of covered entities and
manufactuers, HRSA publishes its audit findings in summary format as
full audit reports may include proprietary and/or sensitive business
information (for example, under the statute, 340B ceiling prices
themselves cannot be publicly disclosed). Consistent with this
approach, HRSA will publish 340B ADR final agency decisions on a HRSA
public-facing website within 120 calendar days of issuance.
Comment: Some commenters suggest that HHS revise this section to
require the 340B ADR Panel or OPA to inform the parties of their
reconsideration rights when the 340B ADR Panel's decision is
communicated to the parties.
Response: HHS agrees and is finalizing this rule to include a
provision that would ensure that parties are informed of their
reconsideration rights at the time the 340B ADR Panel's decision is
communicated to the parties.
Comment: HHS received several comments recommending that HHS revise
this section to require manufacturers or covered entities to repay the
other party within a specified time-period (e.g., 60 days) of the date
340B ADR Panel's decision letter or the HRSA Administrator's
reconsideration decision.
Response: The NPRM explained that once the parties have been
notified of the final agency decision and no request for
reconsideration has been made in accordance with Sec. 10.24, the OPA
Director will consider whether to take enforcement action to ensure
corrective action to the extent allowed under the 340B statute. For
example, based on the final agency decision, the OPA Director may
require a covered entity to repay an affected manufacturer in a timely
manner. In addition, in the case of a 340B ADR Panel decision involving
an overcharge, the OPA Director may require that the manufacturer
refund or issue a credit to the impacted covered entity. Such an
enforcement decision may include the time frame and manner of such
remedies.
Section 10.24 340B ADR Panel Decision Reconsideration Process
The NPRM proposed a process for either party to initiate a
reconsideration request within 20 business days of the date of the 340B
ADR Panel's decision letter. The HRSA Administrator, or their designee,
may initiate the process without such a request. The NPRM also proposed
that a reconsideration process may only be granted when a party
demonstrates that the 340B ADR Panel decision may have been inaccurate
or flawed. As proposed, the reconsideration process would involve the
HRSA Administrator, or designee, reviewing the record and the 340B ADR
Panel's decision, and either issuing a revised decision to be effective
20 business days from issuance or declining to issue a revised
decision. Finally, the NPRM proposed that the reconsideration decision
or the 340B ADR Panel decision (in the event of a declination) will
serve as the final agency decision and will be binding upon the parties
involved in the dispute, unless invalidated by an order of a Federal
court. The proposed rule indicates that the OPA Director will determine
any necessary corrective action, or consider whether to take
enforcement action, and the form of any such action, based on the final
agency decision. There were several comments received on the
reconsideration process, and HHS is finalizing this provision with some
clarifications as discussed below.
Comment: The majority of comments received support a
reconsideration process by the HRSA Administrator. Some suggest that
HHS clarify the timeline for a reconsideration decision.
Response: HHS appreciates the comments received in support of a
reconsideration process conducted by the HRSA Administrator. Regarding
a timeline for the HRSA Administrator's reconsideration and after
review of the comments, the HRSA Administrator will make efforts to
issue a reconsideration decision within 180 calendar days from the
initiation of the reconsideration process. HHS is finalizing, as
proposed, that if a reconsideration decision is rendered, the
reconsideration decision, unless altered or reversed (after review) by
the Secretary, will serve as the final agency decision and will be
binding on the parties involved in the dispute, unless invalidated by
an order of a Federal court.
Comment: Some commenters recommend that HHS lengthen the amount of
time for parties to request a reconsideration. The NPRM contemplates
that a request for reconsideration must be made within 20 business days
of the date of the 340B ADR Panel's decision letter. Commenters urged
HHS to revise this timeline to either 30 or 60 business days to allow
for more time to (1) determine that they believe the reconsideration is
necessary and (2) file the request in a timely manner.
Response: HHS agrees with the commenters and is finalizing Sec.
10.24(b) to lengthen the time that a request for reconsideration can be
made from the proposed 20 business days to 30 business days. This will
allow a requestor additional time to obtain consent in the case of a
joint or consolidated claim for a reconsideration request as indicated
in Sec. 10.24(b)(3). In the event that no request for reconsideration
is received by either party after the 30-day period, the 340B ADR Panel
decision or any such alteration or reversal by the Secretary (after
review) will serve as the final
[[Page 28655]]
agency decision and will be binding on the parties involved in the
dispute, unless invalidated by an order of a Federal court.
Comment: Some commenters request that HHS clarify that new facts or
information may not be submitted as part of the reconsideration
process. They argue that new legal or policy arguments may be warranted
in light of the 340B ADR Panel's decision and should not be prohibited.
Response: HHS has clarified in Sec. 10.24 to state that no new
``facts,'' information, or legal or policy arguments may be submitted
as part of the reconsideration process in order to remain consistent
with the content reviewed by the 340B ADR Panel in reaching their
decision.
Comment: Several commenters request that HHS remove the proposed
provision at Sec. 10.24(b)(3), which would require that in the case of
joint or consolidated claims, the requestor for reconsideration submit
documentation showing consent to the reconsideration process, including
signatures of the individuals representing each covered entity or
manufacturer. They state that it is unclear why consent should be
required for a reconsideration request when the covered entity or
manufacturer previously consented to joint/consolidated representation
as part of the 340B ADR process as outlined in Sec. 10.21(c).
Response: After consideration of the comments, HHS will permit
associations or organizations filing a claim on behalf of its members
to submit an attestation that they have confirmed that all covered
entities have agreed to be part of the reconsideration process. Also,
as discussed above, HHS is modifying the proposal to lengthen the time
for a party to initiate a reconsideration request from 20 business days
to 30 business days.
Comment: A few commenters recommended that HHS clarify the HRSA
Administrator's standard of review used when analyzing the 340B ADR
Panel's decision and further clarify that the 340B ADR Panel's decision
is held in abeyance until the HRSA Administrator issues a decision on
reconsideration.
Response: The standard that the HRSA Administrator will use in
reviewing any reconsideration request will be the same for each
request. The HRSA Administrator will review the record, including the
340B ADR Panel decision, and determine whether there was an error in
the 340B ADR Panel's decision, including any deviation from policy,
guidance or statute. HHS has made this clear in this final rule. HHS
will also clarify in Sec. 10.24 that in the event of a reconsideration
request, the 340B ADR Panel's decision is held in abeyance until the
HRSA Administrator modifies or sustains the 340B ADR Panel's decision.
Any such reconsideration decision letter will be effective 30 business
days from issuance and serve as the final agency decision unless within
30 business days of issuance, the Secretary makes a determination that
the Secretary will review the decision. The final agency decision will
be binding upon the parties involved in the dispute unless invalidated
by an order of a Federal court.
Section 10.25 Severability
In this final rule, we adopt modifications to 42 CFR part 10 that
support a unified scheme for review of 340B ADR claims. While the unity
and comprehensiveness of this scheme maximizes its utility, we clarify
that its constituent elements operate independently of each other. Were
a provision of this regulation stayed or invalidated by a reviewing
court, the provisions that remain in effect would continue to provide a
process for review of 340B claims. For example, this final rule
contains a number of requirements to be fulfilled prior to review by
the 340 ADR Panel, such as providing evidence of good faith efforts and
evidence that each covered entity consents to the combining of the
claims for a joint claim. To the extent that these provisions were no
longer in effect, the remainder of the final rule could still function
without these provisions.
To best serve these purposes, we have addressed severability in the
regulations to make clear that the provisions of 42 CFR part 10 are
designed to operate independently of each other and to convey the
Department's intent that the potential invalidity of one provision or
any of its subparts should not affect the remainder of the provisions.
III. Regulatory Impact Analysis
A. Regulatory Impact Analysis
HHS has examined the effects of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving
Regulation and Regulatory Review (January 18, 2011), Executive
Order 14094 on Modernizing Regulatory Review (April 6, 2023), the
Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354), the
Unfunded Mandates Reform Act of 1995 (UMRA; Pub. L. 104-4), and
Executive Order 13132 on Federalism (August 4, 1999). HHS did not
receive any substantive comments on this section of the proposed rule
and is therefore finalizing this section as proposed.
B. Overall Impact
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 is supplemental to and reaffirms the principles,
structures, and definitions governing regulatory review as established
in Executive Order 12866, emphasizing the importance of quantifying
both costs and benefits, of reducing costs, harmonizing rules, and
promoting flexibility.
Under E.O. 12866, OMB's Office of Information and Regulatory
Affairs (OIRA) determines whether a regulatory action is significant
and, therefore, subject to the requirements of the E.O. and review by
OMB. See 58 FR 51735 (Oct. 4, 1993). Section 1(b) of E.O. 14094 amended
sec. 3(f) of E.O. 12866 to define a ``significant regulatory action''
as an action that is likely to result in a rule that may: (1) have an
annual effect on the economy of $200 million or more (adjusted every 3
years by the Administrator of OIRA for changes in gross domestic
product) or adversely affect in a material way the economy, a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, territorial, or Tribal governments
or communities; (2) create a serious inconsistency or otherwise
interfere with an action taken or planned by another agency; (3)
materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs, or the rights and obligations of recipients
thereof; or (4) raise legal or policy issues for which centralized
review would meaningfully further the President's priorities or the
principles set forth in the E.O. See 88 FR 21879 (Apr. 11, 2023). OIRA
has determined that this final rule is a significant regulatory action,
although not a significant regulatory action under sec. 3(f)(1) of E.O.
12866. Accordingly, OMB has reviewed this final rule.
This final rule would modify the framework for HHS to resolve
certain disputed claims regarding manufacturers overcharging covered
entities and disputed claims of diversion and duplicate discounts by
covered entities audited by
[[Page 28656]]
manufacturers under the 340B Program. HHS does not anticipate the
modification of the 340B ADR process to result in significant economic
impact. Because this rule only updates an existing process, there is no
additional economic impact. In addition, the parties involved already
have the information that will reported through the 340B ADR process;
therefore, we do not anticipate any additional impact. This is also
consistent with a similar determination in the 2020 final rule that
``HHS does not anticipate the introduction of an ADR process to result
in significant economic impacts.'' Pursuant to Subtitle E of the Small
Business Regulatory Enforcement Fairness Act of 1996, also known as the
Congressional Review Act (5 U.S.C. 801 et seq.), OIRA has determined
that this rule does not meet the criteria set forth in 5 U.S.C. 804(2).
C. The Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA; 5 U.S.C. 601 et seq.) and the
Small Business Regulatory Enforcement and Fairness Act of 1996
(SBREFA), which amended the RFA, requires HHS to analyze options for
regulatory relief of small businesses. If a rule has a significant
economic effect on a substantial number of small entities, HHS must
specifically consider the economic effect of this rule on small
entities and analyze regulatory options that could lessen the impact of
this rule. HHS will use a RFA threshold of at least a 3 percent impact
on at least 5 percent of small entities.
This final rule's requirements would affect drug manufacturers
(North American Industry Classification System code 325412:
Pharmaceutical Preparation Manufacturing). The small business size
standard for drug manufacturers is 750 employees. Approximately 700
drug manufacturers participate in the 340B Program. While it is
possible to estimate the impact of this final rule on the industry as a
whole, the data necessary to project the impact of changes on specific
manufacturers or groups of manufacturers is not available, as HRSA does
not collect the information necessary to assess the size of an
individual manufacturer that participates in the 340B Program. This
final rule would also affect health care providers. For purposes of the
RFA, HHS considers all health care providers to be small entities
either by virtue of meeting the Small Business Administration (SBA)
size standard for a small business, or for being a nonprofit
organization that is not dominant in its market. The current SBA size
standard for health care providers ranges from annual receipts of $8
million to $41.5 million. As of April 1, 2023, 14,134 covered entities
participate in the 340B Program.
This final rule would modify the ADR mechanism for reviewing claims
by manufacturers that covered entities have violated certain statutory
obligations and claims by covered entities alleging overcharges for
340B covered outpatient drugs by manufacturers. This 340B ADR process
would require submission of documents that manufacturers and covered
entities are already required to maintain as part of their
participation in the 340B Program. HHS expects that this documentation
would be readily available prior to submitting a claim. Therefore, the
collection of this information would not result in an economic impact
or create additional administrative burden on these businesses.
By design of this final rule, the 340B ADR process will resolve
claims in a fair, efficient, and expeditious manner in accordance with
section 340B(d)(3)(B)(ii) of the PHS Act. This final rule provides an
option to join or consolidate claims by similar situated entities, and
covered entities may have claims asserted on their behalf by
associations or organizations which could reduce costs. HHS has
determined, and the Secretary certifies, that this final rule would not
have a significant economic impact on a substantial number of small
health care providers or a significant impact on the operations of a
substantial number of small manufacturers; therefore, HHS is not
preparing an analysis of impact for the purposes of the RFA. HHS
estimates that the economic impact on the less than 5 percent of small
entities and small manufacturers participating in the 340B Program
would be minimal and less than a 3 percent economic burden and
therefore does not meet the RFA threshold of 3 percent.
D. Unfunded Mandates Reform Act of 1995
Section 202(a) of the Unfunded Mandates Reform Act of 1995 UMRA
requires that agencies prepare a written statement, which includes an
assessment of anticipated costs and benefits, before proposing ``any
rule that includes any Federal mandate that may result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of $100 million or more (adjusted annually
for inflation) in any one year.'' In 2023, that threshold is
approximately $177 million. HHS does not expect this rule to exceed the
threshold.
E. Executive Order 13132--Federalism
HHS has reviewed this final rule in accordance with Executive Order
13132 regarding federalism and has determined that it does not have
federalism implications. This final rule would not ``have substantial
direct effects on the States, or on the relationship between the
national government and the States, or on the distribution of power and
responsibilities among the various levels of government.'' The final
rule would also not adversely affect the following family elements:
family safety, family stability, marital commitment; parental rights in
the education, nurture, and supervision of their children; family
functioning, disposable income, or poverty; or the behavior and
personal responsibility of youth, as determined under section 654(c) of
the Treasury and General Government Appropriations Act of 1999.
F. Collection of Information
The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that OMB approve all collections of information by a Federal agency
from the public before they can be implemented. This final rule would
not impact the current reporting and recordkeeping burden for
manufacturers or covered entities under the 340B Program. Because the
340B ADR process provides the mechanism and procedures for an
administrative action or investigation involving an agency against
specific individuals or entities, pursuant to 44 U.S.C. 3518(c), the
340B ADR process is exempt from Paperwork Reduction Act requirements.
In addition, participants in the 340B Program are already required to
maintain the necessary records to submit an ADR claim.
List of Subjects in 42 CFR Part 10
Biologics, Business and industry, Diseases, Drugs, Health, Health
care, Health facilities, Hospitals, 340B Drug Pricing Program.
Dated: April 12, 2024.
Xavier Becerra,
Secretary, Department of Health and Human Services.
For the reasons set forth in the preamble, the Department of Health
and Human Services amends 42 CFR part 10 as follows:
PART 10--340B DRUG PRICING PROGRAM
0
1. The authority citation for part 10 continues to read as follows:
[[Page 28657]]
Authority: Sec. 340B of the Public Health Service Act (42 U.S.C.
256b) (PHSA), as amended.
0
2. Amend Sec. 10.3 by:
0
a. Removing the definition for Administrative Dispute Resolution (ADR)
Process and dding the definition 340B Administrative Dispute Resolution
(ADR) process in its place;
0
b. Revising the definitions for Administrative Dispute Resolution Panel
(340B ADR Panel), Claim, Consolidated claim, and Joint claim; and
0
c. Adding in alphabetical order the definition for Office of Pharmacy
Affairs (OPA).
The revisions and additions read as follows:
Sec. 10.3 Definitions.
* * * * *
340B Administrative Dispute Resolution (ADR) process means a
process used to resolve the following types of claims, including any
issues that assist the 340B ADR Panel in resolving such claims:
(1) Claims by covered entities that may have been overcharged for
covered outpatient drugs purchased from manufacturers; and
(2) Claims by manufacturers of 340B drugs, after a manufacturer has
conducted an audit of a covered entity (pursuant to section
340B(a)(5)(C) of the Public Health Service Act (PHS Act)), that a
covered entity may have violated the prohibitions against duplicate
discounts or diversion.
Administrative Dispute Resolution Panel (340B ADR Panel) means a
decision-making body within the Health Resources and Services
Administration's Office of Pharmacy Affairs that reviews and makes
decisions for claims filed through the 340B ADR process.
* * * * *
Claim means a written allegation filed by or on behalf of a covered
entity or by a manufacturer for resolution under the 340B ADR process.
* * * * *
Consolidated claim means a claim resulting from combining multiple
manufacturers' claims against the same covered entity.
* * * * *
Joint claim means a claim resulting from combining multiple covered
entities' claims (or claims from their membership organizations or
associations) against the same manufacturer for the same drug or drugs.
* * * * *
Office of Pharmacy Affairs (OPA) means the office, or any successor
office assigned to administer the 340B Program, within the Health
Resources and Services Administration, or any successor agency, that
oversees the 340B Program.
* * * * *
0
3. Revise subpart C to read as follows:
Subpart C--Administrative Dispute Resolution
Sec.
10.20 340B Administrative Dispute Resolution Panel.
10.21 Claims.
10.22 Covered entity information and document requests.
10.23 340B ADR Panel decision process.
10.24 340B ADR Panel decision reconsideration process.
10.25 Severability.
Subpart C--Administrative Dispute Resolution
Sec. 10.20 340B Administrative Dispute Resolution Panel.
The Secretary shall appoint a roster of eligible individuals
(Roster) consisting of staff within OPA, to serve on a 340B ADR Panel,
as defined in Sec. 10.3. The OPA Director, or the OPA Director's
designee, shall select at least three members from the Roster to form a
340B ADR Panel to review and make decisions regarding one or more
claims filed by covered entities or manufacturers.
(a) Members of the 340B ADR Panel. (1) The OPA Director shall:
(i) Select at least three members for each 340B ADR Panel from the
Roster of appointed staff;
(ii) Have the authority to remove an individual from the 340B ADR
Panel and replace such individual; and
(iii) Select replacement 340B ADR Panel members should an
individual resign from the panel or otherwise be unable to complete
their duties.
(2) No member of the 340B ADR Panel may have a conflict of
interest, as set forth in paragraph (b) of this section.
(b) Conflicts of interest. (1) All members appointed by the
Secretary to the Roster of individuals eligible to be selected for a
340B ADR Panel will be screened for conflicts of interest prior to
reviewing a claim. In determining whether a conflict exists, the OPA
Director, in consultation with government ethics officials, will
consider financial interest(s), current or former business or
employment relationship(s), or other involvement of a prospective panel
member or close family member who is either employed by or otherwise
has a business relationship with an involved party, subsidiary of an
involved party, or particular claim(s) expected to be presented to the
prospective panel member.
(2) All members of the 340B ADR Panel will undergo an additional
screening prior to reviewing a specific claim to ensure that the 340B
ADR Panel member was not directly involved in a decision concerning the
specific issue of the ADR claim as it relates to the specific covered
entity or manufacturer involved, including previous 340B ADR Panel
decisions.
(c) Secretarial authority in the 340B ADR process. The Secretary
may remove any individual from the Roster of 340B ADR Panelists for any
reason, including from any 340B ADR Panel to which the individual has
already been assigned. The Secretary has the authority to review and
reverse, alter, or uphold any 340B ADR Panel or reconsideration
decision as outlined in Sec. Sec. 10.23 and 10.24. Any such decision
of the Secretary will serve as the final agency decision and will be
binding upon the parties involved in the dispute, unless invalidated by
an order of a Federal court.
(d) Duties of the 340B ADR Panel. The 340B ADR Panel will:
(1) Review and evaluate claims, including consolidated and joint
claims, and documents and information submitted by (or on behalf of)
covered entities and manufacturers;
(2) Review and may request additional documentation, information,
or clarification of an issue from any or all parties to make a decision
(if the 340B ADR Panel finds that a party has failed to respond or
fully respond to an information request, the 340B ADR Panel may proceed
with facts that the 340B ADR Panel determines have been established in
the proceeding);
(3) Evaluate claims based on information received, unless, at the
340B ADR Panel's discretion, the nature of the claim necessitates that
a meeting with the parties be held;
(4) At its discretion, consult with others, including staff within
OPA, other HHS offices, and other Federal agencies while reviewing a
claim; and
(5) Make decisions on each claim.
Sec. 10.21 Claims.
(a) Claims permitted. All claims must be specific to the parties
identified in the claims and are limited to the following:
(1) Claims by a covered entity that it has been overcharged by a
manufacturer for a covered outpatient drug, including claims that a
manufacturer has limited the covered entity's ability to purchase
covered outpatient drugs at or below the 340B ceiling price; and
[[Page 28658]]
(2) Claims by a manufacturer, after it has conducted an audit of a
covered entity pursuant to section 340B(a)(5)(C) of the PHS Act, that
the covered entity has violated section 340B(a)(5)(A) of the PHS Act,
regarding the prohibition of duplicate discounts, or section
340B(a)(5)(B) of the PHS Act, regarding the prohibition of the resale
or transfer of covered outpatient drugs to a person who is not a
patient of the covered entity.
(b) Requirements for filing a claim. (1) Absent extenuating
circumstances, a covered entity or manufacturer must file a claim under
this section in writing to OPA within 3 years of the date of the
alleged violation. Any file, document, or record associated with the
claim that is the subject of a dispute must be maintained by the
covered entity and manufacturer until the date of the final agency
decision.
(2) A covered entity filing a claim described in paragraph (a)(1)
of this section must provide the basis, including all available
supporting documentation, for its belief that it has been overcharged
by a manufacturer, in addition to any other documentation as may be
requested by OPA. A covered entity claim against multiple manufacturers
is not permitted.
(3) A manufacturer filing a claim under paragraph (a)(2) of this
section must provide documents sufficient to support its claim that a
covered entity has violated the prohibition on diversion and/or
duplicate discounts, in addition to any other documentation as may be
requested by OPA.
(4) A covered entity or manufacturer filing a claim must provide
documentation of good faith efforts, including for example,
documentation demonstrating that the initiating party has made attempts
to contact the opposing party regarding the specific issues cited in
the ADR claim.
(c) Combining claims. (1) Two or more covered entities may jointly
file claims of overcharges by the same manufacturer for the same drug
or drugs if each covered entity consents to the jointly filed claim and
meets the filing requirements.
(i) For covered entity joint claims, the claim must list each
covered entity, its 340B ID and include documentation as described in
paragraph (b) of this section, which demonstrates that each covered
entity meets all of the requirements for filing the ADR claim.
(ii) For covered entity joint claims, a letter requesting the
combining of claims must accompany the claim at the time of filing and
must document that each covered entity consents to the combining of the
claims, including signatures of individuals representing each covered
entity and a point of contact for each covered entity.
(2) An association or organization may file on behalf of one or
more covered entities representing their interests if:
(i) Each covered entity is a member of the association or the
organization representing it and each covered entity meets the
requirements for filing a claim;
(ii) The joint claim filed by the association or organization must
assert overcharging by a single manufacturer for the same drug(s); and
(iii) The claim includes a letter from the association or
organization attesting that each covered entity agrees to the
organization or association asserting a claim on its behalf, including
a point of contact for each covered entity.
(3) A manufacturer or manufacturers may request to consolidate
claims brought by more than one manufacturer against the same covered
entity if each manufacturer could individually file a claim against the
covered entity, consents to the consolidated claim, meets the
requirements for filing a claim, and the 340B ADR Panel determines that
such consolidation is appropriate and consistent with the goals of
fairness and economy of resources. Consolidated claims filed on behalf
of manufacturers by associations or organizations representing their
interests are not permitted.
(d) Deadlines and procedures for filing a claim. (1) Covered
entities and manufacturers must file claims in writing with OPA, in the
manner set forth by OPA.
(2) OPA will conduct an initial review of all information submitted
by the party filing the claim and will make a determination as to
whether the requirements in paragraph (b) of this section are met. The
OPA staff conducting the initial review of a claim may not be appointed
to serve on the 340B ADR Panel reviewing that specific claim.
(3) Additional information to substantiate a claim may be submitted
by the initiating party and may be requested by OPA. If additional
information is requested, the initiating party will have 20 business
days from the receipt of OPA's request to respond. If the initiating
party does not respond to a request for additional information within
the specified time frame or request and receive an extension, the claim
will not move forward to the 340B ADR Panel for review.
(4) OPA will provide written notification to the initiating party
that the claim is complete. Once the claim is complete, OPA will also
provide written notification to the opposing party that the claim was
submitted. This written notification will provide a copy of the
initiating party's claim, and additional instructions regarding the
340B ADR process, including timelines and information on how to submit
their response in accordance with the procedures for responding to a
claim as outlined in paragraph (e) of this section.
(5) If OPA finds that the claim meets the requirements described in
paragraph (b) of this section, and once OPA receives the opposing
party's response in accordance with the procedures outlined in
paragraph (e) of this section, additional written notification will be
sent to both parties advising that the claim will be forwarded to the
340B ADR Panel for review.
(6) If OPA finds that the claim does not meet the requirements
described in paragraph (b) of this section, written notification will
be sent to both parties stating the reasons that the claim did not move
forward.
(7) For any claim that does not move forward for review by the 340B
ADR Panel, the claim may be revised and refiled if there is new
information to support the alleged statutory violation and the claim
meets the criteria set forth in this section.
(e) Responding to a submitted claim. (1) Upon receipt of
notification by OPA that a claim is deemed complete and has met the
requirements in paragraph (b) of this section, the opposing party in
alleged violation will have 30 business days to submit a written
response to OPA.
(2) A party may submit a request for an extension of the initial 30
business days response period and OPA will make a determination to
approve or disapprove such request and notify both parties.
(3) OPA will provide a copy of the opposing party's response to the
initiating party and will notify both parties that the claim has moved
forward for review by the 340B ADR Panel.
(4) If an opposing party does not respond or elects not to
participate in the 340B ADR process, OPA will notify both parties that
the claim has moved forward for review by the 340B ADR Panel and the
340B ADR Panel will render its decision after review of the information
submitted in the claim.
Sec. 10.22 Covered entity information and document requests.
(a) To request information necessary to support its claim from an
opposing party, a covered entity must submit a written request for
additional
[[Page 28659]]
information or documents to the 340B ADR Panel within 20 business days
of the receipt from OPA that the claim was forwarded to the 340B ADR
Panel for review. The 340B ADR Panel will review the information/
document request and notify the covered entity if the request is not
reasonable, not relevant or beyond the scope of the claim, and will
permit the covered entity to resubmit a revised request if necessary.
(b) The 340B ADR Panel will transmit the covered entity's
information/document request to the manufacturer who must respond to
the request within 20 business days of receipt of the request.
(c) The manufacturer must fully respond, in writing, to an
information/document request from the 340B ADR Panel by the response
deadline.
(1) A manufacturer is responsible for obtaining relevant
information or documents from any wholesaler or other third party that
may facilitate the sale or distribution of its drugs to covered
entities.
(2) If a manufacturer anticipates that it will not be able to
respond to the information/document request by the deadline, it can
request one extension by notifying the 340B ADR Panel in writing within
15 business days of receipt of the request.
(3) A request to extend the deadline must include the reason why
the specific deadline is not feasible and must outline the proposed
timeline for fully responding to the information/document request.
(4) The 340B ADR Panel may approve or disapprove the request for an
extension of time and will notify all parties in writing of its
decision.
(5) If the 340B ADR Panel finds that a manufacturer has failed to
fully respond to an information/document request, the 340B ADR Panel
will proceed with the facts that the 340B ADR Panel has determined have
been established in the proceeding.
(6) If a manufacturer believes an information request to a covered
entity is necessary for the 340B ADR Panel's review, it may make a
request to the 340B ADR Panel to make the request to the covered
entity.
Sec. 10.23 340B ADR Panel decision process.
(a) The 340B ADR Panel will conduct a review of the claims. The
340B ADR Panel will review all documents gathered during the 340B ADR
process to determine if a violation as described in Sec. 10.21(a)(1)
or (2) has occurred.
(b) The 340B ADR Panel will prepare a decision letter based on its
review. The 340B ADR Panel's decision letter will be completed within
one year of receiving a complete claim for review, except to the extent
that there are situations beyond the control of the 340B ADR Panel that
may affect the ability to issue a decision on a claim within one year.
If the issuance of a 340B ADR Panel decision will exceed one year, the
340B ADR Panel must provide notice to the parties involved. The 340B
ADR Panel decision letter will represent the determination of a
majority of the 340B ADR Panel members' findings regarding the claim
and include an explanation regarding each finding. The 340B ADR Panel
will transmit its decision letter to all parties and to the OPA
Director.
(c) The 340B ADR Panel decision letter will inform the parties
involved of their rights for reconsideration as described in Sec.
10.24. Either party may request reconsideration of the 340B ADR Panel
decision or the Health Resources and Service Administration (HRSA)
Administrator may decide to initiate a reconsideration without such a
request. The final agency decision will be binding upon the parties
involved in the dispute unless invalidated by an order of a Federal
court. The 340B ADR Panel's decision letter will be effective 30
business days from issuance and serve as the final agency decision
unless:
(1) Within 30 business days of issuance, reconsideration occurs
under Sec. 10.24; or
(2) Within 30 business days of issuance, the Secretary makes a
determination that the Secretary will review the decision.
(d) The OPA Director will determine any necessary corrective action
or consider whether to take enforcement action, and the form of any
such action, based on the final agency decision.
Sec. 10.24 340B ADR Panel decision reconsideration process.
(a) Either party may initiate a reconsideration request, or the
HRSA Administrator may decide to initiate the process without such a
request. In the event of a reconsideration request, the 340B ADR
Panel's decision is held in abeyance until such time the HRSA
Administrator makes a reconsideration decision of the 340B ADR Panel
decision (or in the event of a declination). A reconsideration decision
will affirm or supersede a 340B ADR Panel decision.
(b) The request for a reconsideration of the 340B ADR Panel's
decision must be made to the HRSA Administrator within 30 business days
of the date of the 340B ADR Panel's decision letter.
(1) The request for reconsideration must include a copy of the 340B
ADR Panel decision letter, and documentation indicating why a
reconsideration is warranted.
(2) New facts, information, legal arguments, or policy arguments
may not be submitted as part of the reconsideration process in order to
remain consistent with the facts that were reviewed by the 340B ADR
Panel in determining their decision.
(3) In the case of joint or consolidated claims, the
reconsideration request must include an attestation confirming that all
of the entities have agreed to be part of the reconsideration process.
(c) The standard for review of the reconsideration request by the
HRSA Administrator, or their designee, will include a review of the
record, including the 340B ADR Panel decision, and a determination of
whether there was an error in the 340B ADR Panel's decision. The HRSA
Administrator, or designee, may consult with other HHS officials, as
necessary.
(d) The HRSA Administrator, or their designee, will make a
determination based on the reconsideration request by either issuing a
revised decision or declining to issue a revised decision.
(e) The reconsideration decision letter will be effective 30
business days from issuance and serve as the final agency decision
unless within 30 business days of issuance, the Secretary makes a
determination that the Secretary will review the decision. The final
agency decision will be binding upon the parties involved in the
dispute unless invalidated by an order of a Federal court.
(f) The OPA Director will determine any necessary corrective
action, or consider whether to take enforcement action, and the form of
any such action, based on the final agency decision.
Sec. 10.25 Severability.
If any provision of this subpart is held to be invalid or
unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of utter
invalidity or unenforceability, in which event the provision shall be
severable from this part and shall not affect the remainder thereof.
[FR Doc. 2024-08262 Filed 4-18-24; 8:45 am]
BILLING CODE 4165-15-P
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