On September 24, 2020, the Health Resources and Services Administration (HRSA) released a proposed rule, Implementation of Executive Order 13937, “Executive Order on Access to Affordable Life-saving Medication.” This Executive Order (EO) directed HHS to take action to ensure that future grants under the Public Health Service Act are conditioned upon a Federally Qualified Health Center (FQHC) having an established practice to make insulin and injectable epinephrine available to certain low income individuals at the discounted price paid by the FQHC grantee or subgrantee as a covered entity under the 340 Prescription Drug Program. The 340B EO was signed in late July 2020 along with 3 other prescription drug-related Executive Orders.
Comments on the proposed rule are due on October 28, 2020.
The proposed rule would implement the new requirement for all awards made under section 330(e) of the Public Health Service Act. This section of statute authorizes the Health Center Program under which grants are made to eligible entities that provide healthcare services for underserved populations.
Health centers or subrecipients receiving funding under this portion of statute that are enrolled in the 340B Program and purchase insulin and injectable epinephrine, and are reimbursed or provide reimbursement to other entities for these drugs, must have an established practice to make these products available to low-income patients at or below the price paid through the 340B Program. The health centers may charge a minimal administration fee; the proposed rule says this fee should not create a barrier to access for low-income patients and suggests the relevant state’s Medicaid dispensing fee as a comparison.
Low income patients are defined as individuals or families with annual incomes at or below 350% of the Federal Poverty Guidelines. These patients will have insurance with a high cost sharing requirement for either insulin or injectable epinephrine, a high unmet deductible, or have no health insurance. HRSA proposes to define these requirements as follows:
• High cost sharing: exceeds 20 percent of the amount the health center is charging patients for the drug;

• High unmet deductible: the portion of the patient’s yearly deductible that has not been meet exceeding 20% of the deductible regardless of the total annual deductible;
• Health insurance: refers to private insurance, state plans, exchange plans, employer-funded plans, Medicare, Medicaid, and CHIP.
In the proposed rule, HRSA states that the health centers are expected to provide this discount to health center patients only and further, those who are low-income. Individuals would not be considered a health center patient if the only health care service they receive from the health center is the dispensing of a drug(s) for self-administration or administration at home. However, the proposed rule does not restrict a health center from setting the price for insulin and injectable epinephrine lower than the price paid through the 340B program.
Health centers will have to demonstrate “established practices” through written policies, procedures, and/or other relevant documents. Health centers with subgrantees that participate in the 340B Program will also have to demonstrate that the subgrantees have established practices that comply with the requirement. HRSA says that such practices would include providing information to patients in an “understandable format” about administration fees and the low-income, high cost sharing, and high unmet deductible standards. In addition, eligible health centers would not be required to charge third party payors the discounted price and contract pharmacy arrangements under 340B entities would also be included in the policies of this proposed rule.
HRSA did not include an analysis of the impact of this proposed rule since it does not meet the established “economically significant” threshold of $100 million or more in any one year. HRSA notes that the Executive Order and this proposed rule are limited to two classes of drugs so the agency believes the economic impact will be minimal.