82_FR_14384 82 FR 14332 - 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation

82 FR 14332 - 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Federal Register Volume 82, Issue 52 (March 20, 2017)

Page Range14332-14334
FR Document2017-05491

The Health Resources and Services Administration (HRSA) administers section 340B of the Public Health Service Act (PHSA), which is referred to as the ``340B Drug Pricing Program'' or the ``340B Program.'' The January 5, 2017 final rule sets forth the calculation of the ceiling price and application of civil monetary penalties, and applies to all drug manufacturers that are required to make their drugs available to covered entities under the 340B Program. This interim final rule delays the effective date of the final rule published in the Federal Register (82 FR 1210, (January 5, 2017)) to May 22, 2017. Commenters are also invited to provide their views on whether a longer delay of the effective date to October 1, 2017, would be more appropriate.

Federal Register, Volume 82 Issue 52 (Monday, March 20, 2017)
[Federal Register Volume 82, Number 52 (Monday, March 20, 2017)]
[Rules and Regulations]
[Pages 14332-14334]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-05491]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 10

RIN 0906-AA89


340B Drug Pricing Program Ceiling Price and Manufacturer Civil 
Monetary Penalties Regulation

AGENCY: Health Resources and Services Administration, HHS.

ACTION: Interim final rule; further delay of effective date with 
comment.

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SUMMARY: The Health Resources and Services Administration (HRSA) 
administers section 340B of the Public Health Service Act (PHSA), which 
is referred to as the ``340B Drug Pricing Program'' or the ``340B 
Program.'' The January 5, 2017 final rule sets forth the calculation of 
the ceiling price and application of civil monetary penalties, and 
applies to all drug manufacturers that are required to make their drugs 
available to covered entities under the 340B Program. This interim 
final rule delays the effective date of the final rule published in the 
Federal Register (82 FR 1210, (January 5, 2017)) to May 22, 2017. 
Commenters are also invited to provide their views on whether a longer 
delay of the effective date to October 1, 2017, would be more 
appropriate.

DATES: As of March 20, 2017, the effective date of the final rule 
published in the Federal Register (82 FR 1210, January 5, 2017) is 
further delayed to May 22, 2017. Comments on the delay of the effective 
date to May 22, 2017, as well as comments on alternatively delaying the 
effective date further to October 1, 2017, must be submitted on or 
before April 19, 2017.

ADDRESSES: You may submit comments, identified by the Regulatory 
Information Number (RIN) 0906-AA89, by any of the following methods. 
Please submit your comments in only one of these ways to minimize the 
receipt of duplicate submissions. The first is the preferred method.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow instructions for submitting comments. This is the preferred 
method for the submission of comments.
     Email: [email protected]. Include 0906-AA89 in the 
subject line of the message.
     Mail: Office of Pharmacy Affairs (OPA), Healthcare Systems 
Bureau (HSB), Health Resources and Services Administration (HRSA), 5600 
Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857.
    All submitted comments will be available to the public in their 
entirety. Please do not submit confidential commercial information or 
personal identifying information that you do not want in the public 
domain.

FOR FURTHER INFORMATION CONTACT: CAPT Krista Pedley, Director, OPA, 
HSB, HRSA, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857, or 
by telephone at 301-594-4353.

SUPPLEMENTARY INFORMATION: 

I. Background

    In September 2010, HHS published an advanced notice of proposed 
rulemaking (ANPRM) in the Federal Register, ``340B Drug Pricing Program 
Manufacturer Civil Monetary Penalties'' (75 FR 57230, (September 20, 
2010)). HHS subsequently published a notice of proposed rulemaking 
(NPRM) in June 2015 to implement civil monetary penalties (CMPs) for 
manufacturers who knowingly and intentionally charge a covered entity 
more than the ceiling price for a covered outpatient drug; to provide 
clarity on the requirement that manufacturers calculate the 340B 
ceiling price on a quarterly basis; and to establish the requirement 
that a manufacturer charge a $.01 (penny pricing policy) for drugs when 
the calculation equals zero (80 FR 34583, (June 17, 2015)). The public 
comment period closed in August 2015, and HRSA received approximately 
35 comments. After review of the initial comments, HHS reopened the 
comment period (81 FR 22960, (April 19, 2016)) to invite additional 
comment on specific areas of the NPRM: 340B ceiling price calculations 
that result in a ceiling price that equals zero (penny pricing); the 
methodology that manufacturers utilize when estimating the ceiling 
price for a new covered outpatient drug; and the definition of the 
``knowing and intentional'' standard to be applied when assessing a CMP 
on manufacturers who overcharge a covered entity. The comment period 
closed May 19, 2016, and HHS received approximately 70 additional 
comments.
    On January 5, 2017, HHS published a final rule in the Federal 
Register (82 FR 1210, (January 5, 2017)) and comments from both the 
NPRM and the reopening notice were considered in the development of the 
final rule. The provisions of that rule were to be effective March 6, 
2017; however, HHS issued a subsequent final rule (82 FR 12508, (March 
6, 2017)) delaying the effective date to March 21, 2017, in accordance 
with a January 20, 2017, memorandum from the Assistant to the President 
and Chief of Staff, entitled

[[Page 14333]]

``Regulatory Freeze Pending Review.'' \1\ In the January 2017 final 
rule, HHS recognized that the effective date fell in the middle of a 
quarter and that stakeholders needed time to adjust systems and update 
their policies and procedures. As such, HHS stated that it intended to 
enforce the requirements of the final rule at the start of the next 
quarter, which began April 1, 2017. However, after further 
consideration and to provide affected parties sufficient time to make 
needed changes to facilitate compliance, and because there are 
substantive questions raised, we intend to engage in longer rulemaking. 
In addition, HHS believes that it is important to ensure that this 
rulemaking--as well as the implementation of this rule--is coordinated 
with and takes into consideration overall 340B Program implementation. 
HHS has therefore decided to delay the effective date of the final rule 
to May 22, 2017, and is inviting comments on whether to delay that date 
further to October 1, 2017. As the effective date of the final rule has 
been moved to May 22, 2017, and may be further delayed, enforcement 
will be correspondingly delayed. HHS believes that the delay of the 
effective date is necessary to consider questions of fact, law, and 
policy raised in the rule, consistent with the ``Regulatory Freeze 
Pending Review'' memorandum. In addition, HHS believes that the delay 
of the effective date is necessary to provide regulated entities 
sufficient time to implement the requirements of the rule.
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    \1\ See: https://www.whitehouse.gov/the-press-office/2017/01/20/memorandum-heads-executive-departments-and-agencies.
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II. Good Cause for Interim Final Rulemaking

    Under Section 553(b) of the Administrative Procedure Act (APA) (5 
U.S.C. 551 et seq.), a general notice of proposed rulemaking is not 
required when an agency, for good cause, finds that notice and public 
comment thereon are impracticable, unnecessary, or contrary to the 
public interest. Pursuant to 5 U.S.C. 553(b)(3)(B), HHS finds that good 
cause exists to waive normal rulemaking requirements for the immediate 
delay of the effective date to May 22, 2017. HHS believes that a 
notice-and-comment procedure, in this limited instance, is 
impracticable, unnecessary, and contrary to the public interest.
    In order to promote the public interest in fulfilling the 
``Regulatory Freeze Pending Review'' memorandum instruction to agencies 
to review substantial questions of fact, law, and policy in regulations 
not currently in effect, HHS feels that it is necessary to delay 
immediately the effective date of this rule. In addition, the January 
20, 2017, Executive Order entitled, ``Minimizing the Economic Burden of 
the Patient Protection and Affordable Care Act Pending Repeal,'' 
specifically instructs HHS and all other heads of executive offices to 
utilize all authority and discretion available to delay the 
implementation of certain provisions or requirements of the Patient 
Protection and Affordable Care Act.\2\ The January 2017 final rule is 
based on changes made to the 340B Program by the Patient Protection and 
Affordable Care Act. It is impracticable to gather comments prior to 
the effective date of March 21, 2017. HHS continues to be concerned 
that the previously announced effective date for the January 2017 final 
rule does not allow for a sufficient amount of time to consider the 
regulatory burdens that may be posed by this issuance and does not 
provide regulated entities sufficient time to come into compliance with 
the requirements of the rule.
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    \2\ See: https://www.whitehouse.gov/the-press-office/2017/01/2/executive-order-minimizing-economic-burden-patient-protection-and
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    The provisions of the APA that ordinarily require a notice of 
proposed rulemaking do not apply here because public health, safety, 
and welfare could be harmed by allowing the final rule to go into 
effect without a delay. There are substantive questions raised, and HHS 
will be further considering questions of fact, law, and policy 
presented by the rule consistent with the ``Regulatory Freeze Pending 
Review'' memorandum. In this unique circumstance, allowing the 
regulation to become effective while further consideration is ongoing, 
prior to further proper consideration of all the relevant facts, would 
exacerbate the burdens conveyed in comments submitted in the prior 
rulemaking. Requiring manufacturers to make targeted and potentially 
costly changes to pricing systems and business procedures in order to 
come into compliance with a rule that is itself subject to further 
agency consideration and for which there are substantive questions 
raised would be disruptive. Given the comments, it appears that 
objections regarding the timing and challenges of compliance with the 
rule, 82 FR 1211, as well as other objections to the rule, may not have 
been adequately considered, thereby requiring additional time and 
public comment before the rule goes into effect. Providing a public 
comment period before delaying the effective date is impracticable 
given the impending deadline.
    HHS also finds that good cause exists for immediate implementation 
of this interim final rule and waiver of the Administrative Procedure 
Act's 30-day delay in the effective date. The 30-day delay is normally 
intended to give affected parties time to adjust their business 
practices and make preparations before a final rule takes effect. 
Because the action being taken delays the effective date to May 22, 
2017, at the earliest, a 30-day delay in effect of this action is 
unnecessary. The effective date delay will permit those subject to the 
rule extra time to comply with the rule until at least May 22, 2017.

III. Regulatory Impact Analysis

    HHS has examined the effects of this interim final rule as required 
by Executive Order 12866 on Regulatory Planning and Review (September 
30, 1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 8, 2011), the Regulatory Flexibility Act (Pub. L. 96-
354, September 19, 1980), the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4), and Executive Order 13132 on Federalism (August 4, 
1999).

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 is supplemental to and reaffirms the principles, 
structures, and definitions governing regulatory review as established 
in Executive Order 12866, emphasizing the importance of quantifying 
both costs and benefits, of reducing costs, of harmonizing rules, and 
of promoting flexibility. Section 3(f) of Executive Order 12866 defines 
a ``significant regulatory action'' as an action that is likely to 
result in a rule: (1) Having an annual effect on the economy of $100 
million or more in any 1 year, or adversely and materially affecting a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or Tribal 
governments or communities (also referred to as ``economically 
significant''); (2) creating a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially altering the budgetary impacts of entitlement grants, user 
fees,

[[Page 14334]]

or loan programs or the rights and obligations of recipients thereof; 
or (4) raising novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order. A regulatory impact analysis (RIA) must be 
prepared for major rules with economically significant effects ($100 
million or more in any 1 year), and a ``significant'' regulatory action 
is subject to review by the Office of Management and Budget (OMB).
    HHS does not believe that the proposal to delay the effective date 
of the January 5, 2017, final rule will have an economic impact of $100 
million or more, and is therefore not designated as an ``economically 
significant'' interim final rule under section 3(f)(1) of the Executive 
Order 12866. Therefore, the economic impact of having no rule in place 
related to the policies addressed in the final rule is believed to be 
minimal, as the policies would not yet be required or enforceable.

The Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) and the 
Small Business Regulatory Enforcement and Fairness Act of 1996, which 
amended the RFA, require HHS to analyze options for regulatory relief 
of small businesses. If a rule has a significant economic effect on a 
substantial number of small entities, the Secretary must specifically 
consider the economic effect of the rule on small entities and analyze 
regulatory options that could lessen the impact of the rule. HHS will 
use an RFA threshold of at least a 3 percent impact on at least 5 
percent of small entities.
    For purposes of the RFA, HHS considers all health care providers to 
be small entities either by meeting the Small Business Administration 
(SBA) size standard for a small business, or for being a nonprofit 
organization that is not dominant in its market. The current SBA size 
standard for health care providers ranges from annual receipts of $7 
million to $35.5 million. As of January 1, 2017, over 12,000 covered 
entities participate in the 340B Program, which represent safety-net 
health care providers across the country. HHS has determined, and the 
Secretary certifies, that this interim final rule will not have a 
significant impact on the operations of a substantial number of small 
manufacturers; therefore, we are not preparing an analysis of impact 
for this RFA. HHS estimates that the economic impact on small entities 
and small manufacturers will be minimal. HHS welcomes comments 
concerning the impact of this interim final rule on small manufacturers 
and small health care providers.

Unfunded Mandates Reform Act

    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year.'' In 2013, that threshold level was 
approximately $141 million. HHS does not expect this rule to exceed the 
threshold.

Executive Order 13132--Federalism

    HHS has reviewed this interim final rule in accordance with 
Executive Order 13132 regarding federalism, and has determined that it 
does not have ``federalism implications.'' This interim final rule 
would not ``have substantial direct effects on the States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' This interim final rule would not adversely affect the 
following family elements: Family safety, family stability, marital 
commitment; parental rights in the education, nurture, and supervision 
of their children; family functioning, disposable income or poverty; or 
the behavior and personal responsibility of youth, as determined under 
Section 654(c) of the Treasury and General Government Appropriations 
Act of 1999.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that OMB approve all collections of information by a federal agency 
from the public before they can be implemented. This interim final rule 
is projected to have no impact on current reporting and recordkeeping 
burden for manufacturers under the 340B Program. This interim final 
rule would result in no new reporting burdens. Comments are welcome on 
the accuracy of this statement.

    Dated: March 13, 2017.
James Macrae,
Acting Administrator, Health Resources and Services Administration.
    Approved: March 15, 2017.

Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-05491 Filed 3-17-17; 8:45 am]
 BILLING CODE 4165-15-P



                                             14332              Federal Register / Vol. 82, No. 52 / Monday, March 20, 2017 / Rules and Regulations

                                             requirements of section 12(d) of the                    DEPARTMENT OF HEALTH AND                              Please do not submit confidential
                                             National Technology Transfer and                        HUMAN SERVICES                                        commercial information or personal
                                             Advancement Act of 1995 (15 U.S.C.                                                                            identifying information that you do not
                                             272 note) do not apply. As required by                  42 CFR Part 10                                        want in the public domain.
                                             section 3 of Executive Order 12988 (61                  RIN 0906–AA89                                         FOR FURTHER INFORMATION CONTACT:
                                             FR 4729, February 7, 1996), in issuing
                                                                                                                                                           CAPT Krista Pedley, Director, OPA,
                                             this rule, EPA has taken the necessary                  340B Drug Pricing Program Ceiling
                                                                                                                                                           HSB, HRSA, 5600 Fishers Lane, Mail
                                             steps to eliminate drafting errors and                  Price and Manufacturer Civil Monetary
                                                                                                                                                           Stop 08W05A, Rockville, MD 20857, or
                                             ambiguity, minimize potential litigation,               Penalties Regulation
                                                                                                                                                           by telephone at 301–594–4353.
                                             and provide a clear legal standard for
                                                                                                     AGENCY:   Health Resources and Services
                                             affected conduct. EPA has complied                                                                            SUPPLEMENTARY INFORMATION:
                                                                                                     Administration, HHS.
                                             with Executive Order 12630 (53 FR
                                             8859, March 15, 1988) by examining the                  ACTION: Interim final rule; further delay             I. Background
                                             takings implications of the rule in                     of effective date with comment.
                                                                                                                                                              In September 2010, HHS published an
                                             accordance with the ‘‘Attorney                          SUMMARY:   The Health Resources and                   advanced notice of proposed
                                             General’s Supplemental Guidelines for                   Services Administration (HRSA)                        rulemaking (ANPRM) in the Federal
                                             the Evaluation of Risk and Avoidance of                 administers section 340B of the Public                Register, ‘‘340B Drug Pricing Program
                                             Unanticipated Takings’’ issued under                    Health Service Act (PHSA), which is                   Manufacturer Civil Monetary Penalties’’
                                             the executive order. This rule does not                 referred to as the ‘‘340B Drug Pricing                (75 FR 57230, (September 20, 2010)).
                                             impose an information collection                        Program’’ or the ‘‘340B Program.’’ The                HHS subsequently published a notice of
                                             burden under the provisions of the                      January 5, 2017 final rule sets forth the             proposed rulemaking (NPRM) in June
                                             Paperwork Reduction Act of 1995, 44                     calculation of the ceiling price and                  2015 to implement civil monetary
                                             U.S.C. 3501 et seq.                                     application of civil monetary penalties,              penalties (CMPs) for manufacturers who
                                                The Congressional Review Act, 5                      and applies to all drug manufacturers                 knowingly and intentionally charge a
                                             U.S.C. 801 et seq., as added by the Small               that are required to make their drugs                 covered entity more than the ceiling
                                             Business Regulatory Enforcement                         available to covered entities under the               price for a covered outpatient drug; to
                                             Fairness Act of 1996, generally provides                340B Program. This interim final rule                 provide clarity on the requirement that
                                             that before a rule may take effect, the                 delays the effective date of the final rule           manufacturers calculate the 340B
                                             agency promulgating the rule must                       published in the Federal Register (82                 ceiling price on a quarterly basis; and to
                                             submit a rule report, which includes a                  FR 1210, (January 5, 2017)) to May 22,                establish the requirement that a
                                             copy of the rule, to each House of the                  2017. Commenters are also invited to                  manufacturer charge a $.01 (penny
                                             Congress and to the Comptroller General                 provide their views on whether a longer               pricing policy) for drugs when the
                                             of the United States. EPA will submit a                 delay of the effective date to October 1,             calculation equals zero (80 FR 34583,
                                             report containing this document and                     2017, would be more appropriate.                      (June 17, 2015)). The public comment
                                             other required information to the U.S.                  DATES: As of March 20, 2017, the                      period closed in August 2015, and
                                             Senate, the U.S. House of                               effective date of the final rule published            HRSA received approximately 35
                                             Representatives, and the Comptroller                    in the Federal Register (82 FR 1210,                  comments. After review of the initial
                                             General of the United States prior to                   January 5, 2017) is further delayed to                comments, HHS reopened the comment
                                             publication in the Federal Register. A                  May 22, 2017. Comments on the delay                   period (81 FR 22960, (April 19, 2016))
                                             major rule cannot take effect until 60                  of the effective date to May 22, 2017, as             to invite additional comment on specific
                                             days after it is published in the Federal               well as comments on alternatively                     areas of the NPRM: 340B ceiling price
                                             Register. This action is not a ‘‘major                  delaying the effective date further to                calculations that result in a ceiling price
                                             rule’’ as defined by 5 U.S.C. 804(2). This              October 1, 2017, must be submitted on                 that equals zero (penny pricing); the
                                             action will be effective May 19, 2017,                  or before April 19, 2017.                             methodology that manufacturers utilize
                                             unless objections to this authorization                 ADDRESSES: You may submit comments,                   when estimating the ceiling price for a
                                             are received.                                           identified by the Regulatory Information              new covered outpatient drug; and the
                                                                                                     Number (RIN) 0906–AA89, by any of the                 definition of the ‘‘knowing and
                                             List of Subjects in 40 CFR Part 271                     following methods. Please submit your                 intentional’’ standard to be applied
                                                Environmental protection,                            comments in only one of these ways to                 when assessing a CMP on manufacturers
                                             Administrative practice and procedure,                  minimize the receipt of duplicate                     who overcharge a covered entity. The
                                             Confidential business information,                      submissions. The first is the preferred               comment period closed May 19, 2016,
                                             Hazardous waste, Hazardous waste                        method.                                               and HHS received approximately 70
                                             transportation, Indian lands,                              • Federal eRulemaking Portal: http://              additional comments.
                                             Intergovernmental relations, Penalties,                 www.regulations.gov. Follow
                                                                                                     instructions for submitting comments.                    On January 5, 2017, HHS published a
                                             Reporting and recordkeeping                                                                                   final rule in the Federal Register (82 FR
                                             requirements.                                           This is the preferred method for the
                                                                                                     submission of comments.                               1210, (January 5, 2017)) and comments
                                                Authority: This action is issued under                  • Email: 340BCMPNPRM@hrsa.gov.                     from both the NPRM and the reopening
                                             the authority of sections 2002(a), 3006,                Include 0906–AA89 in the subject line                 notice were considered in the
                                             and 7004(b) of the Solid Waste Disposal                 of the message.                                       development of the final rule. The
                                             Act, as amended, 42 U.S.C. 6912(a),                        • Mail: Office of Pharmacy Affairs                 provisions of that rule were to be
                                             6926, and 6974(b).                                                                                            effective March 6, 2017; however, HHS
nlaroche on DSK30NT082PROD with RULES




                                                                                                     (OPA), Healthcare Systems Bureau
                                                                                                     (HSB), Health Resources and Services                  issued a subsequent final rule (82 FR
                                               Dated: March 9, 2017.
                                                                                                     Administration (HRSA), 5600 Fishers                   12508, (March 6, 2017)) delaying the
                                             V. Anne Heard,                                                                                                effective date to March 21, 2017, in
                                                                                                     Lane, Mail Stop 08W05A, Rockville, MD
                                             Acting Regional Administrator, Region 4.                20857.                                                accordance with a January 20, 2017,
                                             [FR Doc. 2017–05464 Filed 3–17–17; 8:45 am]                All submitted comments will be                     memorandum from the Assistant to the
                                             BILLING CODE 6560–50–P                                  available to the public in their entirety.            President and Chief of Staff, entitled


                                        VerDate Sep<11>2014   15:08 Mar 17, 2017   Jkt 241001   PO 00000   Frm 00014   Fmt 4700   Sfmt 4700   E:\FR\FM\20MRR1.SGM   20MRR1


                                                                Federal Register / Vol. 82, No. 52 / Monday, March 20, 2017 / Rules and Regulations                                           14333

                                             ‘‘Regulatory Freeze Pending Review.’’ 1                 policy in regulations not currently in                impracticable given the impending
                                             In the January 2017 final rule, HHS                     effect, HHS feels that it is necessary to             deadline.
                                             recognized that the effective date fell in              delay immediately the effective date of                  HHS also finds that good cause exists
                                             the middle of a quarter and that                        this rule. In addition, the January 20,               for immediate implementation of this
                                             stakeholders needed time to adjust                      2017, Executive Order entitled,                       interim final rule and waiver of the
                                             systems and update their policies and                   ‘‘Minimizing the Economic Burden of                   Administrative Procedure Act’s 30-day
                                             procedures. As such, HHS stated that it                 the Patient Protection and Affordable                 delay in the effective date. The 30-day
                                             intended to enforce the requirements of                 Care Act Pending Repeal,’’ specifically               delay is normally intended to give
                                             the final rule at the start of the next                 instructs HHS and all other heads of                  affected parties time to adjust their
                                             quarter, which began April 1, 2017.                     executive offices to utilize all authority            business practices and make
                                             However, after further consideration                    and discretion available to delay the                 preparations before a final rule takes
                                             and to provide affected parties sufficient              implementation of certain provisions or               effect. Because the action being taken
                                             time to make needed changes to                          requirements of the Patient Protection                delays the effective date to May 22,
                                             facilitate compliance, and because there                and Affordable Care Act.2 The January                 2017, at the earliest, a 30-day delay in
                                             are substantive questions raised, we                    2017 final rule is based on changes                   effect of this action is unnecessary. The
                                             intend to engage in longer rulemaking.                  made to the 340B Program by the                       effective date delay will permit those
                                             In addition, HHS believes that it is                    Patient Protection and Affordable Care                subject to the rule extra time to comply
                                             important to ensure that this                           Act. It is impracticable to gather                    with the rule until at least May 22, 2017.
                                             rulemaking—as well as the                               comments prior to the effective date of               III. Regulatory Impact Analysis
                                             implementation of this rule—is                          March 21, 2017. HHS continues to be
                                             coordinated with and takes into                         concerned that the previously                            HHS has examined the effects of this
                                             consideration overall 340B Program                      announced effective date for the January              interim final rule as required by
                                             implementation. HHS has therefore                       2017 final rule does not allow for a                  Executive Order 12866 on Regulatory
                                             decided to delay the effective date of the              sufficient amount of time to consider                 Planning and Review (September 30,
                                             final rule to May 22, 2017, and is                      the regulatory burdens that may be                    1993), Executive Order 13563 on
                                             inviting comments on whether to delay                   posed by this issuance and does not                   Improving Regulation and Regulatory
                                             that date further to October 1, 2017. As                provide regulated entities sufficient                 Review (January 8, 2011), the Regulatory
                                             the effective date of the final rule has                time to come into compliance with the                 Flexibility Act (Pub. L. 96–354,
                                                                                                     requirements of the rule.                             September 19, 1980), the Unfunded
                                             been moved to May 22, 2017, and may
                                                                                                       The provisions of the APA that                      Mandates Reform Act of 1995 (Pub. L.
                                             be further delayed, enforcement will be
                                                                                                     ordinarily require a notice of proposed               104–4), and Executive Order 13132 on
                                             correspondingly delayed. HHS believes
                                                                                                     rulemaking do not apply here because                  Federalism (August 4, 1999).
                                             that the delay of the effective date is
                                             necessary to consider questions of fact,                public health, safety, and welfare could              Executive Orders 12866 and 13563
                                             law, and policy raised in the rule,                     be harmed by allowing the final rule to
                                                                                                     go into effect without a delay. There are                Executive Orders 12866 and 13563
                                             consistent with the ‘‘Regulatory Freeze                                                                       direct agencies to assess all costs and
                                             Pending Review’’ memorandum. In                         substantive questions raised, and HHS
                                                                                                     will be further considering questions of              benefits of available regulatory
                                             addition, HHS believes that the delay of                                                                      alternatives and, if regulation is
                                             the effective date is necessary to provide              fact, law, and policy presented by the
                                                                                                     rule consistent with the ‘‘Regulatory                 necessary, to select regulatory
                                             regulated entities sufficient time to                                                                         approaches that maximize net benefits
                                             implement the requirements of the rule.                 Freeze Pending Review’’ memorandum.
                                                                                                                                                           (including potential economic,
                                                                                                     In this unique circumstance, allowing
                                             II. Good Cause for Interim Final                                                                              environmental, public health and safety
                                                                                                     the regulation to become effective while
                                             Rulemaking                                                                                                    effects, distributive impacts, and
                                                                                                     further consideration is ongoing, prior
                                                                                                                                                           equity). Executive Order 13563 is
                                                Under Section 553(b) of the                          to further proper consideration of all the
                                                                                                                                                           supplemental to and reaffirms the
                                             Administrative Procedure Act (APA) (5                   relevant facts, would exacerbate the
                                                                                                                                                           principles, structures, and definitions
                                             U.S.C. 551 et seq.), a general notice of                burdens conveyed in comments
                                                                                                                                                           governing regulatory review as
                                             proposed rulemaking is not required                     submitted in the prior rulemaking.
                                                                                                                                                           established in Executive Order 12866,
                                             when an agency, for good cause, finds                   Requiring manufacturers to make
                                                                                                                                                           emphasizing the importance of
                                             that notice and public comment thereon                  targeted and potentially costly changes
                                                                                                                                                           quantifying both costs and benefits, of
                                             are impracticable, unnecessary, or                      to pricing systems and business
                                                                                                                                                           reducing costs, of harmonizing rules,
                                             contrary to the public interest. Pursuant               procedures in order to come into
                                                                                                                                                           and of promoting flexibility. Section 3(f)
                                             to 5 U.S.C. 553(b)(3)(B), HHS finds that                compliance with a rule that is itself
                                                                                                                                                           of Executive Order 12866 defines a
                                             good cause exists to waive normal                       subject to further agency consideration
                                                                                                                                                           ‘‘significant regulatory action’’ as an
                                             rulemaking requirements for the                         and for which there are substantive
                                                                                                                                                           action that is likely to result in a rule:
                                             immediate delay of the effective date to                questions raised would be disruptive.
                                                                                                                                                           (1) Having an annual effect on the
                                             May 22, 2017. HHS believes that a                       Given the comments, it appears that
                                                                                                                                                           economy of $100 million or more in any
                                             notice-and-comment procedure, in this                   objections regarding the timing and
                                                                                                                                                           1 year, or adversely and materially
                                             limited instance, is impracticable,                     challenges of compliance with the rule,
                                                                                                                                                           affecting a sector of the economy,
                                             unnecessary, and contrary to the public                 82 FR 1211, as well as other objections
                                                                                                                                                           productivity, competition, jobs, the
                                             interest.                                               to the rule, may not have been
                                                                                                                                                           environment, public health or safety, or
                                                In order to promote the public interest              adequately considered, thereby
                                                                                                                                                           State, local, or Tribal governments or
                                             in fulfilling the ‘‘Regulatory Freeze                   requiring additional time and public
                                                                                                                                                           communities (also referred to as
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                                             Pending Review’’ memorandum                             comment before the rule goes into effect.
                                                                                                                                                           ‘‘economically significant’’); (2) creating
                                             instruction to agencies to review                       Providing a public comment period
                                                                                                                                                           a serious inconsistency or otherwise
                                             substantial questions of fact, law, and                 before delaying the effective date is
                                                                                                                                                           interfering with an action taken or
                                               1 See: https://www.whitehouse.gov/the-press-            2 See: https://www.whitehouse.gov/the-press-        planned by another agency; (3)
                                             office/2017/01/20/memorandum-heads-executive-           office/2017/01/2/executive-order-minimizing-          materially altering the budgetary
                                             departments-and-agencies.                               economic-burden-patient-protection-and                impacts of entitlement grants, user fees,


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                                             14334              Federal Register / Vol. 82, No. 52 / Monday, March 20, 2017 / Rules and Regulations

                                             or loan programs or the rights and                      small manufacturers and small health                    Dated: March 13, 2017.
                                             obligations of recipients thereof; or (4)               care providers.                                       James Macrae,
                                             raising novel legal or policy issues                                                                          Acting Administrator, Health Resources and
                                             arising out of legal mandates, the                      Unfunded Mandates Reform Act                          Services Administration.
                                             President’s priorities, or the principles                 Section 202(a) of the Unfunded                        Approved: March 15, 2017.
                                             set forth in the Executive Order. A                     Mandates Reform Act of 1995 requires                  Thomas E. Price,
                                             regulatory impact analysis (RIA) must
                                                                                                     that agencies prepare a written                       Secretary, Department of Health and Human
                                             be prepared for major rules with
                                                                                                     statement, which includes an                          Services.
                                             economically significant effects ($100
                                             million or more in any 1 year), and a                   assessment of anticipated costs and                   [FR Doc. 2017–05491 Filed 3–17–17; 8:45 am]

                                             ‘‘significant’’ regulatory action is subject            benefits, before proposing ‘‘any rule that            BILLING CODE 4165–15–P

                                             to review by the Office of Management                   includes any Federal mandate that may
                                             and Budget (OMB).                                       result in the expenditure by State, local,
                                                HHS does not believe that the                        and Tribal governments, in the                        DEPARTMENT OF HOMELAND
                                             proposal to delay the effective date of                 aggregate, or by the private sector, of               SECURITY
                                             the January 5, 2017, final rule will have               $100 million or more (adjusted annually
                                             an economic impact of $100 million or                   for inflation) in any one year.’’ In 2013,            Federal Emergency Management
                                             more, and is therefore not designated as                that threshold level was approximately                Agency
                                             an ‘‘economically significant’’ interim                 $141 million. HHS does not expect this
                                             final rule under section 3(f)(1) of the                 rule to exceed the threshold.                         44 CFR Part 67
                                             Executive Order 12866. Therefore, the                                                                         [Docket ID FEMA–2016–0002]
                                             economic impact of having no rule in                    Executive Order 13132—Federalism
                                             place related to the policies addressed                                                                       Final Flood Elevation Determinations
                                                                                                        HHS has reviewed this interim final
                                             in the final rule is believed to be
                                             minimal, as the policies would not yet                  rule in accordance with Executive Order               AGENCY:  Federal Emergency
                                             be required or enforceable.                             13132 regarding federalism, and has                   Management Agency, DHS.
                                                                                                     determined that it does not have                      ACTION: Final rule.
                                             The Regulatory Flexibility Act (RFA)                    ‘‘federalism implications.’’ This interim
                                                The Regulatory Flexibility Act (5                    final rule would not ‘‘have substantial               SUMMARY:   Base (1% annual-chance)
                                             U.S.C. 601 et seq.) (RFA) and the Small                 direct effects on the States, or on the               Flood Elevations (BFEs) and modified
                                             Business Regulatory Enforcement and                     relationship between the national                     BFEs are made final for the
                                             Fairness Act of 1996, which amended                     government and the States, or on the                  communities listed below. The BFEs
                                             the RFA, require HHS to analyze                         distribution of power and                             and modified BFEs are the basis for the
                                             options for regulatory relief of small                                                                        floodplain management measures that
                                                                                                     responsibilities among the various
                                             businesses. If a rule has a significant                                                                       each community is required either to
                                                                                                     levels of government.’’ This interim
                                             economic effect on a substantial number                                                                       adopt or to show evidence of being
                                                                                                     final rule would not adversely affect the
                                             of small entities, the Secretary must                                                                         already in effect in order to qualify or
                                                                                                     following family elements: Family                     remain qualified for participation in the
                                             specifically consider the economic                      safety, family stability, marital
                                             effect of the rule on small entities and                                                                      National Flood Insurance Program
                                                                                                     commitment; parental rights in the                    (NFIP).
                                             analyze regulatory options that could
                                                                                                     education, nurture, and supervision of
                                             lessen the impact of the rule. HHS will                                                                       DATES:  The date of issuance of the Flood
                                                                                                     their children; family functioning,
                                             use an RFA threshold of at least a 3                                                                          Insurance Rate Map (FIRM) showing
                                             percent impact on at least 5 percent of                 disposable income or poverty; or the
                                                                                                                                                           BFEs and modified BFEs for each
                                             small entities.                                         behavior and personal responsibility of
                                                                                                                                                           community. This date may be obtained
                                                For purposes of the RFA, HHS                         youth, as determined under Section
                                                                                                                                                           by contacting the office where the maps
                                             considers all health care providers to be               654(c) of the Treasury and General                    are available for inspection as indicated
                                             small entities either by meeting the                    Government Appropriations Act of                      in the table below.
                                             Small Business Administration (SBA)                     1999.
                                                                                                                                                           ADDRESSES: The final BFEs for each
                                             size standard for a small business, or for
                                                                                                     Paperwork Reduction Act                               community are available for inspection
                                             being a nonprofit organization that is
                                                                                                                                                           at the office of the Chief Executive
                                             not dominant in its market. The current                    The Paperwork Reduction Act of 1995                Officer of each community. The
                                             SBA size standard for health care                       (44 U.S.C. 3507(d)) requires that OMB                 respective addresses are listed in the
                                             providers ranges from annual receipts of                approve all collections of information                table below.
                                             $7 million to $35.5 million. As of                      by a federal agency from the public
                                             January 1, 2017, over 12,000 covered                                                                          FOR FURTHER INFORMATION CONTACT: Rick
                                                                                                     before they can be implemented. This                  Sacbibit, Chief, Engineering Services
                                             entities participate in the 340B Program,               interim final rule is projected to have no
                                             which represent safety-net health care                                                                        Branch, Federal Insurance and
                                                                                                     impact on current reporting and                       Mitigation Administration, FEMA, 400
                                             providers across the country. HHS has
                                                                                                     recordkeeping burden for manufacturers                C Street SW., Washington, DC 20472,
                                             determined, and the Secretary certifies,
                                             that this interim final rule will not have              under the 340B Program. This interim                  (202) 646–7659, or (email)
                                             a significant impact on the operations of               final rule would result in no new                     patrick.sacbibit@fema.dhs.gov; or visit
                                             a substantial number of small                           reporting burdens. Comments are                       the FEMA Map Information eXchange
                                             manufacturers; therefore, we are not                    welcome on the accuracy of this                       (FMIX) online at
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                                             preparing an analysis of impact for this                statement.                                            www.floodmaps.fema.gov/fhm/fmx_
                                             RFA. HHS estimates that the economic                                                                          main.html.
                                             impact on small entities and small                                                                            SUPPLEMENTARY INFORMATION:    The
                                             manufacturers will be minimal. HHS                                                                            Federal Emergency Management Agency
                                             welcomes comments concerning the                                                                              (FEMA) makes the final determinations
                                             impact of this interim final rule on                                                                          listed below for the modified BFEs for


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Document Created: 2017-03-18 01:11:17
Document Modified: 2017-03-18 01:11:17
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionInterim final rule; further delay of effective date with comment.
DatesAs of March 20, 2017, the effective date of the final rule published in the Federal Register (82 FR 1210, January 5, 2017) is further delayed to May 22, 2017. Comments on the delay of the effective date to May 22, 2017, as well as comments on alternatively delaying the effective date further to October 1, 2017, must be submitted on or before April 19, 2017.
ContactCAPT Krista Pedley, Director, OPA, HSB, HRSA, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857, or by telephone at 301-594-4353.
FR Citation82 FR 14332 
RIN Number0906-AA89

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