The Department of Health and Human Services has issued its long-delayed final rule establishing an Administrative Dispute Resolution process (“ADR”) for 340B disputes.

The rule allows all 340B covered entities to use the ADR process to bring claims when they have been overcharged by a drug company for 340B drugs, including claims where the 340B entity has been denied 340B pricing by a drug company or its wholesaler.

Other key elements of the final rule include:

  • A requirement that members of the ADR Panel be 340B subject matter experts from the HRSA Office of Pharmacy Affairs
  • A requirement that decisions by the ADR Panel be rendered within one year of the submission of a claim
  • The ability to file disputes even when a claim is subject to concurrent federal court review
  • An administrative process that does not require use of the Federal Rules of Civil Procedure or Evidence
  • A reconsideration process for parties dissatisfied with the ADR Panel’s decision

In response to the final rule, American Hospital Association General Counsel Chad Golder stated:

The Administration’s final rule for the 340B drug pricing program administrative dispute resolution (ADR) process is an important step in ensuring the integrity of the 340B program….The AHA is particularly pleased that the final rule makes clear that an overcharge claim includes instances where a drug company has limited a hospital’s ability to purchase 340B drugs at or below the 340B ceiling price.  This rule will help hold drug companies accountable for their rampant abuses of the 340B program and the patients it serves.

The final rule will take effect on June 18, 2024.

The final rule is linked here and the AHA’s press release is linked here.

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