Health Law Advisor

On July 12, 2024, the FDA provided small dispensers—those employing 25 or fewer full-time pharmacists or pharmacy technicians—with an exemption from the Drug Supply Chain Security Act’s (“DSCSA”) enhanced drug distribution security (“EDDS”) requirements until November 27, 2026.^[1]  The FDA had previously announced a stabilization period effectively delaying enforcement of these EDDS requirements for all trading partners until November 27, 2024.^[2]   Generally, the EDDS requirements are the DSCSA compliance requirements that become effective once trading partners are required to exchange drug product data through an interoperable secure electronic system, as further summarized here. Recently, the FDA widened the exemption from the EDDS requirements to apply to other DSCSA stakeholders, though the length of time for the exemption varies by stakeholder type.

Missing and Incomplete Data Issues

On July 29, 2024, the National Association of Chain Drug Stores (“NACDS”) published a letter to the FDA raising the concern that only 25% to 50% of drug products received by pharmacies had accurate, consistent, and complete EPCIS data.^[3]  NACDS asked for staggered start dates for the EDDS requirements based on trading partner type.^[4]  The Healthcare Distribution Alliance (“HDA”) raised similar concerns and endorsed a similar approach in an August 19, 2024 letter to the FDA.^[5]  If incomplete or inaccurate DSCSA data is not received by a trading partner from an upstream trading partner, then the receiving trading partner should not accept or further distribute that drug product. With such a large volume of inaccurate data, the risk to patient access to drugs and shortages would be high.

Following these two letters, both NACDS and HDA engaged in separate listening sessions with the FDA in late September. During those sessions, they reiterated the concerns that they had outlined in their summer letters. The stakeholders noted that while the percentage of inaccurate or missing data had dropped to 25%, that still meant that on any given day a quarter of serialized drug packages had inaccurate data. The stakeholders also raised concerns that the large volume of independent waiver, exception, and exemption (“WEE”) requests that had been submitted to the FDA if granted, would make the November 27, 2024 transition complex and difficult, and emphasized that further stabilization would be necessary to avoid risks to patient drug access and public health.^[6] 

On July 31, the Centers for Medicare and Medicaid Services (“CMS”) published its mammoth proposed rule entitled “Medicare and Medicaid Programs: Calendar Year 2025 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare Overpayments” (“CY25 PFS Proposed Rule”).

The CY25 PFS Proposed Rule came on the heels of another CMS rule, published on July 22, covering “Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems”—and more (“CY25 OPPS Proposed Rule”). Both rules have a comment period that closes on September 9.

The recent Supreme Court decisions of SEC v. Jarkesy[1] and Loper Bright Enterprises v. Raimondo[2] have the potential to meaningfully impact the implementation and enforcement of the Drug Supply Chain Security Act[3] (“DSCSA”) as industry transitions away from the “stabilization period” ending on November 27, 2024.  The DSCSA statute contemplated that the Enhanced Drug Distribution Security system (“EDDS”) was to be effective November 27, 2023.[4]  Recognizing that many Trading Partners were not yet ready to fully comply with the November 27, 2023 deadline, in August 2023, the FDA issued a compliance policy guidance document with regard to EDDS.[5]  This guidance document provided Trading Partners with a one-year “stabilization period”, through November 27, 2024, during which the FDA would not enforce the statutory EDDS requirements.[6] The stabilization period was implemented to avoid supply chain disruption and to ensure continued patient access to prescription drug products, while Trading Partners continue to work towards compliance with the EDDS requirements.

As we move from the “stabilization period” to perhaps a period of greater enforcement, each of these decisions favor the potential positions of regulated trading partners over the FDA in application to the DSCSA.

Only a few days remain for stakeholders—which includes drug manufacturers, patients, health care providers, pharmacies and others—to take advantage of a rare opportunity to influence the statutory contours of the 340B Drug Pricing Program (the “340B Program” or the “Program”). Specifically, industry stakeholders have until April 1^st to submit comments to legislators regarding the Discussion Draft Explanatory Statement and Supplemental RFI (the “RFI”) of the “Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now ...

On November 30, 2018, the Department for Health and Human Services (“HHS”) Health Resources and Services Administration (“HRSA”) will publish its final rule to change the effective date for its 340B Drug Pricing Program ceiling price and manufacturer civil monetary penalty final rule to January 1, 2019.

After two years of proposed rulemaking, HHS published a final rule on January 5, 2017 outlining requirements of manufacturers to calculate the 340B ceiling price for a covered outpatient drug and the process by which HRSA can levy civil monetary penalties on drug ...

On March 24, 2015, the House of Representatives Energy and Commerce Health Subcommittee^[1] (the "Subcommittee") held a 340B Program hearing with testimony from the Deputy Administrator of Health Resources and Services Administration ("HRSA"), the Director of the Office of Pharmacy Affairs ("OPA") of HRSA,[2] the Director of Health Care of the Government Accountability Office ("GAO"), and Assistant Inspector General of the Office of Evaluation and Inspection of the U.S. Department of Health and Human Services ("HHS") Office of Inspector General ("OIG").

The purpose of the ...

By Constance Wilkinson, Alan Arville, and Jonathan Hoerner

On July 23, 2014, the Health Resources and Services Administration ("HRSA") issued an "interpretive rule" entitled "Implementation of the Exclusion of Orphan Drugs for Certain Covered Entities under the 340B Program" (the "Interpretive Rule").[1] The Interpretive Rule follows the ruling by the U.S. District Court for the District of Columbia on May 23, 2014, that vacated the final rule previously released by HRSA on the treatment of orphan drugs under the 340B program (the "Final Rule").[2]

By way of background, the 340B ...

By Constance Wilkinson, Alan Arville, and David Gibbons

The U.S. Department of Health and Human Services ("HHS") Office of Inspector General ("OIG") released a Report [1] on February 5th based on in-depth interviews with a sample of thirty 340B Covered Entities – half were disproportionate share hospitals ("DSH") and half were community health centers ("CH") – and eight contract pharmacy administrators to gain a better understanding of how contract pharmacy arrangements operate under the 340B Drug Discount Program, codified as Section 340B of the Public Health Service Act ...