The Biden administration, via the Health Resources and Services Administration (HRSA) and the Department of Health and Human Services (HHS), released a proposed rule which seeks to rescind a previous final rule related to 340B discounts for insulin and injectable epinephrine that was adopted in the final months of the Trump administration.

Comments on the proposed rule are due on July 16, 2021.

The final rule, adopted in December 2020, adopted a requirement that certain health centers participating in the 340B Prescription Drug Program have established practices to provide insulin and injectable epinephrine to low-income patients at or below the discounted price paid under the 340B program. This applied to health centers that received grants under section 330(e) of the Public Health Service (PHS) Act, which authorizes the Health Center Program under which grants are made to eligible entities that provide healthcare services for underserved populations. This policy was adopted in response to Executive Order 13937 signed by President Trump in July 2020 which directed HHS to condition grants to these health centers on having such established practices.

Following the regulatory freeze put into place in the early days of the Biden administration, the final rule’s implementation deadline was delayed initially to March 22, 2021 and then further delayed implementation to July 20, 2021.

Now, the administration is proposing to rescind the rule entirely. HHS notes “significant concerns” regarding health centers having to divert resources to implement the rule and maintaining eligibility for future grants, which can impact the health centers’ ability to provide care for the underserved populations they treat. The rule also states that the policy would result in a loss of revenue from 340B savings for the health centers, which HHS believes along with increased administrative costs will result in less resources being available to care for health center patients. HHS and HRSA also acknowledge public comments that stated these health centers often already provide the medications at reduced prices and stated the rule was based on a misunderstanding of the 340B program since the Health Center Program requires any savings be used to benefit the patient population.

The proposed rule does, however, note that the Executive Order remains in effect and that other implementation approaches will be considered.