The proposed rule for 340B Drug Manufacturer Civil Monetary Penalties Regulation posted in the Federal Register June 17, 2015, defines the term “instance” in regards to overcharging a covered entity. The rule states, “An instance of overcharging is any order for covered outpatient drug, by NDC [National Drug Code], which results in a covered entity paying more than the ceiling price” as defined in the rule “for that covered outpatient drug”. The 340B program proposed rule also clarifies that:
“Each order for an NDC will constitute a single instance, regardless of the number of units of each NDC ordered”;
“An instance of overcharging is considered at the [11-digit] NDC level and may not be offset by other discounts provided on any other NDC or discounts provided on the same NDC or other transactions, orders, or purchases”;
“An instance of overcharging may occur at the time of initial purchase or when subsequent ceiling price recalculations due to pricing data submitted to CMS [Center for Medicaid and Medicare Services] resulting in a covered entity paying more than the ceiling price due to failure or refusal to refund or credit a covered entity”;
“A manufacturer’s failure to provide a 340B ceiling price is not considered an instance of overcharging when a covered entity did not initially identify the purchase to the manufacturer as 340B eligible at the time of purchase. Covered entity orders of non-340B priced drugs will not subsequently be considered an instance of overcharging unless the manufacturer’s refusal to sell or make drugs available at the 340B price resulted in the covered entity purchasing at the non-340B price”.
In the proposed rule’s preamble, an example was given for an instance of overcharging, “if a covered entity orders a single bottle of a covered outpatient drug four times a month, it would be considered four instances of overcharging”. Also stating, “This includes any order placed directly with a manufacturer or through a wholesaler, authorized distributor or agent”.
Comments to the proposed rule are being accepted through August 17, 2015. We will keep you posted as to when the final rule is published.
