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This final rule will revise the Administrative Dispute Resolution (ADR) final rule currently in effect and apply to all drug manufacturers and covered entities that participate in the 340B Drug Pricing Program (340B Program). It will establish new requirements and procedures for the 340B Program’s ADR process. This administrative process will 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.

Statement of Need:

This final rule will revise the December 2020 340B Administrative Dispute Resolution (ADR) final rule, which became effective January 13, 2021. The final rule will implement new requirements and procedures for the 340B Program’s ADR process. The final rule applies to drug manufacturers and covered entities participating in the 340B Drug Pricing Program (340B Program) by allowing these entities to file claims for specific compliance areas outlined in the 340B statute after good faith efforts have been exhausted by the parties. It 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 current 340B ADR process.

Summary of the Legal Basis:

Section 340B(d)(3) of the Public Health Service Act (PHS Act) requires the Secretary to promulgate regulations establishing and implementing an ADR process for certain disputes arising under the 340B Program. Under the 340B statute, the purpose of the 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.

Alternatives:

The 2020 340B ADR final rule would remain in effect. This final rule is designed to be more accessible to stakeholders and will use fewer stakeholder and government resources to resolve disputes as opposed to the 2020 340B ADR final rule.

Anticipated Costs and Benefits:

The ADR process will not have a significant financial impact on stakeholders nor result in significant costs.  The final rule will enable stakeholders to resolve disputes in a fair, efficient, and expeditious manner in accordance with section 340B(d)(3) of the Public Health Service Act.

Risks:

None