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The Health Resources and Services Administration (HRSA), an agency of the U.S. Department of Health and Human Services (HHS), has withdrawn a proposed omnibus rule, referred to as the “mega rule,” for the 340B Drug Pricing Program. The mega rule was expected to cover contract pharmacy compliance and eligibility criteria for patients, hospitals and off-campus healthcare sites. The decision to withdraw the mega rule comes amid concerns about HRSA potentially overstepping regulatory and interpretive rulemaking involving 340B regulation, specifically, PhRMA’s and HRSA’s recent actions relating to rules involving <a href="http://e.bakerlaw.com/collect/click.aspx?u=/G1GTPto3VUdqJnlforXH75kXzpeCEQpP+DPAypjvqm1mgM5B8jm3dP6ghhWhXuRRONZVAH30xwG5zBnweE4iazLiT46YPVSy7+cHPkVqcqKwYUagyLsDtv8ogiv3b8c&amp;rh=ff001ba6e7288d48b3cd488a8c459ee2b3f5be47" target="_blank" rel="noopener">Orphan Drugs</a> and <a href="http://e.bakerlaw.com/collect/click.aspx?u=/G1GTPto3VUdqJnlforXH75kXzpeCEQpP+DPAypjvqm1mgM5B8jm3dP6ghhWhXuRRONZVAH30xwG5zBnweE4iazLiT46YPVSs53RfyYhhbKLCykOkVdTnt8iv97/qm6rWlf2PDBJhv/3ozhCVBsd4Q==&amp;rh=ff001ba6e7288d48b3cd488a8c459ee2b3f5be47" target="_blank" rel="noopener">340B</a>.

Earlier this year, a court struck down another 340B rule challenged by the pharmaceutical industry, as the judge held that HHS lacked specific authority to issue the rule. HHS responded to the holding by reissuing the policy as an <a href="http://e.bakerlaw.com/collect/click.aspx?u=/G1GTPto3VUdqJnlforXH75kXzpeCEQpP+DPAypjvqm1mgM5B8jm3b2euLUNotB7eD0V+tbZFPD7xX1KyhryVOUEb4KwfVFOHyohkYGf+2P2tty1Qr7usP4llKJQy/JioEly7dBgTVeK2hb9m28F3Qg7xHnPN6uT&amp;rh=ff001ba6e7288d48b3cd488a8c459ee2b3f5be47" target="_blank" rel="noopener">interpretive rule</a>. The recent takeover of the U.S. Senate by Republicans also may have played a role in the withdrawal. Republican lawmakers have been critical of the 340B program’s expansion, and the issuance of the mega rule may have resulted in more oversight by the Senate.

While the mega rule may have been scrapped, HRSA has announced plans to issue guidance on key 340B policy issues, beginning in 2015. This guidance is expected to cover much of the content of the mega rule. Unlike regulations, however, guidance documents issued by HRSA are considered nonbinding policy. Consequently, the question becomes will HRSA attempt to enforce the policies contained in the guidance, and if so, how?

Interestingly, following HRSA’s issuance of an interpretive rule, HRSA warned drug manufacturers that noncompliance with the interpretive rule on 340B would constitute a statutory violation. Consequently, HRSA already may have shown its hand and the move from an omnibus regulation to guidance for the mega rule may not have a significant practical impact on how HRSA will interact with drug manufacturers. Drug manufacturers should note that HRSA has specified there will be an opportunity for the public to comment on the guidance before final publication.

HRSA Withdraws Proposed “Mega Rule” for 340B Drug Pricing Program