Drug Companies Can Be Fined for Overcharging Hospitals Under 340B Drug Discount Program

Under a new rule, the Health Resources and Services Administration (HRSA) of the Department of Health and Human Services can issue fines of up to $5,000 for each incident to drug manufacturers that knowingly and intentionally overcharge 340B hospitals for drugs purchased under the program. The rule also outlines how manufacturers estimate the ceiling price for a new covered outpatient drug. And, it requires manufacturers to offer refunds for overcharges on new drugs, rather than waiting for providers to request refunds. The agency began enforcing the new rule on April 1.

“Today’s new 340B drug discount program rule should help prevent the drug industry from overcharging America’s 340B health providers for lifesaving medicines,” said Randy Barrett, vice president of communications for 340B Health. “It’s a welcome development in light of public outrage about the unsustainable cost of prescription drugs.”