Covered entities may find a new path to hash out disputes with drugmakers now that the Biden administration has announced plans to replace the existing 340B administrative dispute resolution (ADR) program with a new version.
Notice of the forthcoming new regulation was published as part of a raft of regulatory proposals in the administration’s Fall 2021 Unified Agenda. It would replace the Trump-era final rule that was issued last December and went into effect Jan. 13, 2021. It would establish unspecified new requirements and procedures, “making the process more equitable and accessible for participation by program participants,” HHS wrote in a statement summarizing its forthcoming proposed rules.
“This administrative process would allow covered entities and manufacturers to file claims for specific compliance areas outlined in the statute after good faith efforts have been exhausted by the parties,” the proposed rule states.
There is no detail on the contents of the proposed regulation, which is expected to be published for notice and comment in January. In the statement of need, the administration explains that the proposed rule “better aligns with the President’s priorities on drug pricing, better reflects the current state of the 340B Program, and seeks to correct procedural deficiencies in the 340B ADR process.”
The current ADR rule has been the subject of some legal limbo, as both Eli Lilly and Sanofi have challenged the rule in their lawsuits over HRSA’s findings that their restrictions on 340B contract pharmacy violate the law. A judge in March halted ADR proceedings in the Lilly case, explaining she would likely strike down the ADR rule because the Trump administration did not allow adequate notice and time for comments on the final rule.
Meanwhile, ADR panels have reportedly been appointed to hear complaints against AstraZeneca and Sanofi over their contract pharmacy restrictions.
We will have to see the contents of the final proposed rule before rendering judgment, but Biden’s previous expressions of support for the 340B program are cause for optimism for covered entities.