82 FR 39553 - 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation
DEPARTMENT OF HEALTH AND HUMAN SERVICES Federal Register Volume 82, Issue 160 (August 21, 2017)
Federal Register Volume 82, Issue 160 (August 21, 2017)
| Page Range | 39553-39555 | |
| FR Document | 2017-17633 |
[Federal Register Volume 82, Number 160 (Monday, August 21, 2017)] [Proposed Rules] [Pages 39553-39555] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-17633] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES 42 CFR Part 10 RIN 0906-AB11 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation AGENCY: Health Resources and Services Administration, HHS. ACTION: Notice of proposed rulemaking; further delay of effective date. ----------------------------------------------------------------------- SUMMARY: The Health Resources and Services Administration (HRSA) [[Page 39554]] administers section 340B of the Public Health Service Act (PHSA), which is referred to as the ``340B Drug Pricing Program'' or the ``340B Program.'' HHS is soliciting comments on delaying the effective date of the January 5, 2017 final rule that 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. HHS proposes to delay the effective date of the final rule published in the Federal Register (82 FR 1210, January 5, 2017) to July 1, 2018. HHS proposes this action in order to allow a more deliberate process of considering alternative and supplemental regulatory provisions and to allow for sufficient time for additional rulemaking, as set forth below. DATES: Submit comments on or before September 20, 2017. ADDRESSES: You may submit comments, identified by the Regulatory Information Number (RIN) 0906-AB11, by any of the following methods. Please submit your comments in only one of these ways to minimize the receipt of duplicate submissions.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-AB11 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 On September 30, 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) on June 17, 2015 to implement CMPs for manufacturers who knowingly and intentionally charge a covered entity more than the ceiling price for a covered outpatient drug; to provide clarity regarding the requirement that manufacturers calculate the 340B ceiling price on a quarterly basis; and to establish the requirement that a manufacturer charge $.01 (penny pricing) for each unit of a drug when the ceiling price calculation equals zero (80 FR 34583, June 17, 2015). The public comment period closed on August 17, 2015, and HRSA received 35 comments. After review of the initial comments, HHS reopened the comment period (81 FR 22960, April 19, 2016) to invite additional comments on the following areas of the NPRM: 340B ceiling price calculations that result in a ceiling price that equals zero (penny pricing); the methodology that manufacturers use 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 for manufacturers that overcharge a covered entity. The comment period closed May 19, 2016, and HHS received 72 comments. On January 5, 2017, HHS published a final rule in the Federal Register (82 FR 1210, January 5, 2017); comments from both the original comment period established in the NPRM and the reopened comment period announced in the April 19, 2016 notice were considered in the development of the final rule. The provisions of that final 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, titled ``Regulatory Freeze Pending Review.'' \1\ In the January 5, 2017 final rule, HHS acknowledged that the effective date fell during the middle of a quarter and 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. --------------------------------------------------------------------------- \1\ See: https://www.whitehouse.gov/the-press-office/2017/01/20/memorandum-heads-executive-departments-and-agencies. --------------------------------------------------------------------------- After further consideration and to provide affected parties sufficient time to make needed changes to facilitate compliance, and because questions were raised, HHS issued an interim final rule (82 FR 14332, March 20, 2017), to delay the effective date of the final rule to May 22, 2017, and solicited additional comments on whether that date should be further extended to October 1, 2017. HHS received several comments to the interim final rule, some supporting and some opposing the delay of the effective date to May 22, 2017, or alternatively to October 1, 2017. After careful consideration of the comments received, HHS delayed the effective date of the January 5, 2017 final rule to October 1, 2017 (82 FR 22893, May 19, 2017). II. Proposal To Delay the Effective Date of the Final Rule HHS proposes to further delay the effective date of the January 5, 2017 final rule because it continues to examine important substantive issues in matters covered by the rule. HHS intends to engage in additional rulemaking on these issues. HHS believes that the proposed delay will allow for necessary time to more fully consider the substantial questions of fact, law and policy raised by the rule, consistent with the aforementioned ``Regulatory Freeze Pending Review,'' memorandum. Requiring manufacturers to make targeted and potentially costly changes to pricing systems and business procedures in order to comply with a rule that is under further consideration and for which substantive questions have been raised would be disruptive. We also believe additional time is needed to more fully consider previous objections regarding the timing of the effective date and challenges associated with complying with the rule, as well as other objections to the 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 5, 2017 final rule is based on changes made to the 340B Program by the Patient Protection and Affordable Care Act. HHS is proposing to delay the effective date of the January 5, 2017 final rule to July 1, 2018, to also allow for a sufficient amount of time to more fully consider the regulatory burdens that may be posed by this final rule. --------------------------------------------------------------------------- \2\ See: https://www.whitehouse.gov/the-press-office/2017/01/2/executive-order-minimizing-economic-burden-patient-protection-and --------------------------------------------------------------------------- At this time, HHS seeks public comments regarding the impact of delaying the effective date of the final rule, published January 5, 2017, for an additional nine months from the current [[Page 39555]] effective date of October 1, 2017 to July 1, 2018, while a more deliberate rulemaking process is considered. HHS encourages all stakeholders to provide comments on this proposed rule. III. Regulatory Impact Analysis HHS has examined the effects of this proposed 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, 13563 and 13771 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, 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'' proposed 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. Executive Order 13771, entitled Reducing Regulation and Controlling Regulatory Costs, was issued on January 30, 2017. This proposed rule is not expected to be an EO 13771 regulatory action because this proposed rule is not significant under EO 12866. 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 by 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 proposed 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 proposed 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 proposed rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have ``federalism implications.'' This proposed 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.'' 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 proposed rule is projected to have no impact on current reporting and recordkeeping burden for manufacturers under the 340B Program. This proposed rule would result in no new reporting burdens. Comments are welcome on the accuracy of this statement. George Sigounas, Administrator, Health Resources and Services Administration. Approved: August 16, 2017. Thomas E. Price, Secretary, Department of Health and Human Services. [FR Doc. 2017-17633 Filed 8-17-17; 11:15 am] BILLING CODE 4165-15-P
![Federal Register / Vol. 82, No. 160 / Monday, August 21, 2017 / Proposed Rules 39553
Evaluation process was codified in EPA • The availability and effectiveness of In addition, EPA seeks comment on
regulation for greenhouse gas emission technology, and the appropriate lead the use of alternative methodologies and
standards for model years 2017–2025 time for introduction of technology; modeling systems to assess both
light-duty vehicles, which requires EPA • The cost on the producers or analytical inputs and the standards,
to determine no later than April 1, 2018, purchasers of new motor vehicles or including but not limited to the
whether the standards for model years new motor vehicle engines; Department of Energy’s (DOE’s)
2022–2025 are appropriate.3 In • The feasibility and practicability of Argonne National Laboratory’s
November 2016, EPA issued a proposed the standards; Autonomie full vehicle simulation tool
determination for the Mid-Term • The impact of the standards on and DOT’s CAFE Compliance and
Evaluation.4 On January 12, 2017, the reduction of emissions, oil conservation, Effects Model.
EPA Administrator signed the Final energy security, and fuel savings by In accord with the schedule set forth
Determination of the Mid-Term consumers; in its regulations, the EPA intends to
Evaluation. • The impact of the standards on the make a Final Determination regarding
automobile industry; the appropriateness of the model year
Some stakeholders previously • The impacts of the standards on 2022–2025 greenhouse gas standards,
commented that they were preparing automobile safety; and potentially the model year 2021
studies to inform the Mid-term • The impact of the greenhouse gas greenhouse gas standard, no later than
Evaluation that were not ready for emission standards on the Corporate April 1, 2018.
submission during the previous Mid- Average Fuel Economy standards and a In this document, in the interest of
term Evaluation comment periods. This national harmonized program; and harmonization between the GHG and
additional comment period provides an • The impact of the standards on CAFE programs, EPA is also requesting
opportunity for commenters to submit other relevant factors.5 comment on the separate question of
to EPA additional studies and other Pursuant to 40 CFR 86.1818– whether the light-duty vehicle
materials as well as to complete the 12(h)(1)(viii), EPA also invites greenhouse gas standards established for
preparation of their comments, or comments on the following other factors model year 2021 are appropriate. In its
submit additional comments in light of relevant to setting greenhouse gas July 26, 2017, ‘‘Notice of Intent To
newly available information. There is an emission standards under section 202(a) Prepare an Environmental Impact
existing body of EPA analyses and of the Clean Air Act for model years Statement for Model Year 2022–2025
public comments already in the docket. 2022 through 2025: Corporate Average Fuel Economy
Please note that the agency is primarily • The impact of the standards on Standards,’’ NHTSA stated that as part
interested in comments relevant to the compliance with other air quality of its upcoming CAFE rulemaking, it
reconsideration of the Final standards; may evaluate the model year 2021
Determination, rather than the • The extent to which consumers standards it finalized in 2012 to ensure
Technical Assessment Report (TAR), value fuel savings from greater they remain ‘‘maximum feasible’’ (See
which is not being reopened for efficiency of vehicles; 82 FR 34742). Please provide comment
comment in this document. • The ability for OEMs to incorporate on the continued appropriateness of the
Additionally, NHTSA has been working fuel saving technologies, including model year 2021 GHG standards based
closely with stakeholders to develop its those with ‘‘negative costs,’’ absent the on the application of the factors
forthcoming rulemaking since the standards; described above or any other factors that
March 2017 joint document with EPA, • The distributional consequences on commenters believe are appropriate.
and encourages commenters wishing to households;
inform those efforts to directly • The appropriate reference fleet; Dated: August 10, 2017.
participate in NHTSA’s rulemaking • The impact of the standards on Elaine L. Chao,
process. advanced fuels technology, including Secretary, Department of Transportation.
EPA’s reconsideration will be but not limited to the potential for high- Dated: August 10, 2017.
conducted in accordance with the octane blends; E. Scott Pruitt,
regulations EPA established for the Mid- • The availability of realistic Administrator, Environmental Protection
term Evaluation at 40 CFR 86.1818– technological concepts for improving Agency.
12(h). These regulations state that in efficiency in automobiles that [FR Doc. 2017–17419 Filed 8–18–17; 8:45 am]
making the required determination as to consumers demand, as well as any BILLING CODE 6560–50–P
whether the existing standards are indirect impacts on emissions;
• The advantages or deficiencies in
appropriate under section 202(a) of the
EPA’s past approaches to forecasting
Clean Air Act, the Administrator shall DEPARTMENT OF HEALTH AND
and projecting automobile technologies,
consider the information available on HUMAN SERVICES
including but not limited to baseline
the factors relevant to setting
projections for compliance costs, 42 CFR Part 10
greenhouse gas emission standards
technology penetration rates, technology
under section 202(a) of the Clean Air RIN 0906–AB11
performance, etc.;
Act for model years 2022 through 2025,
• The impact of the standards on
including but not limited to: 340B Drug Pricing Program Ceiling
consumer behavior, including but not
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
limited to consumer purchasing Price and Manufacturer Civil Monetary
3 77 FR 62624 (October 15, 2012). NHTSA is
behavior and consumer automobile Penalties Regulation
statutorily required to conduct a de novo
rulemaking on MY 2022 to 2025 standards for light- usage behavior (e.g. impacts on AGENCY: Health Resources and Services
duty vehicles. NHTSA has recently taken the first rebound, fleet turnover, consumer Administration, HHS.
step in this process by publishing the ‘‘Notice of welfare effects, etc.); and ACTION: Notice of proposed rulemaking;
Intent To Prepare an Environmental Impact
Statement for Model Year 2022–2025 Corporate
• Any relevant information in light of further delay of effective date.
Average Fuel Economy Standards’’ on July 26, newly available information.
2017. SUMMARY: The Health Resources and
4 81 FR 87927 (Dec. 6, 2016). 5 40 CFR 86.1818–12(h)(1). Services Administration (HRSA)
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![Federal Register / Vol. 82, No. 160 / Monday, August 21, 2017 / Proposed Rules 39555
effective date of October 1, 2017 to July be prepared for major rules with RFA. HHS estimates that the economic
1, 2018, while a more deliberate economically significant effects ($100 impact on small entities and small
rulemaking process is considered. HHS million or more in any 1 year), and a manufacturers will be minimal. HHS
encourages all stakeholders to provide ‘‘significant’’ regulatory action is subject welcomes comments concerning the
comments on this proposed rule. to review by the Office of Management impact of this proposed rule on small
and Budget (OMB). manufacturers and small health care
III. Regulatory Impact Analysis HHS does not believe that the providers.
HHS has examined the effects of this proposal to delay the effective date of
proposed rule as required by Executive the January 5, 2017, final rule will have Unfunded Mandates Reform Act
Order 12866 on Regulatory Planning an economic impact of $100 million or Section 202(a) of the Unfunded
and Review (September 30, 1993), more, and is therefore not designated as
Executive Order 13563 on Improving Mandates Reform Act of 1995 requires
an ‘‘economically significant’’ proposed
Regulation and Regulatory Review that agencies prepare a written
rule under section 3(f)(1) of the
(January 8, 2011), the Regulatory statement, which includes an
Executive Order 12866. Therefore, the
Flexibility Act (Pub. L. 96–354, assessment of anticipated costs and
economic impact of having no rule in
September 19, 1980), the Unfunded benefits, before proposing ‘‘any rule that
place related to the policies addressed
Mandates Reform Act of 1995 (Pub. L. includes any Federal mandate that may
in the final rule is believed to be
104–4), and Executive Order 13132 on result in the expenditure by State, local,
minimal, as the policies would not yet
Federalism (August 4, 1999). and Tribal governments, in the
be required or enforceable.
Executive Order 13771, entitled aggregate, or by the private sector, of
Executive Orders 12866, 13563 and $100 million or more (adjusted annually
Reducing Regulation and Controlling
13771 for inflation) in any one year.’’ In 2013,
Regulatory Costs, was issued on January
Executive Orders 12866 and 13563 30, 2017. This proposed rule is not that threshold level was approximately
direct agencies to assess all costs and expected to be an EO 13771 regulatory $141 million. HHS does not expect this
benefits of available regulatory action because this proposed rule is not rule to exceed the threshold.
alternatives and, if regulation is significant under EO 12866. Executive Order 13132—Federalism
necessary, to select regulatory
approaches that maximize net benefits The Regulatory Flexibility Act (RFA)
HHS has reviewed this proposed rule
(including potential economic, The Regulatory Flexibility Act (5 in accordance with Executive Order
environmental, public health and safety U.S.C. 601 et seq.) (RFA) and the Small 13132 regarding federalism, and has
effects, distributive impacts, and Business Regulatory Enforcement and determined that it does not have
equity). Executive Order 13563 is Fairness Act of 1996, which amended ‘‘federalism implications.’’ This
supplemental to and reaffirms the the RFA, require HHS to analyze proposed rule would not ‘‘have
principles, structures, and definitions options for regulatory relief of small substantial direct effects on the States,
governing regulatory review as businesses. If a rule has a significant or on the relationship between the
established in Executive Order 12866, economic effect on a substantial number national government and the States, or
emphasizing the importance of of small entities, the Secretary must on the distribution of power and
quantifying both costs and benefits, of specifically consider the economic responsibilities among the various
reducing costs, of harmonizing rules, effect of the rule on small entities and levels of government.’’
and of promoting flexibility. Section 3(f) analyze regulatory options that could
of Executive Order 12866 defines a lessen the impact of the rule. HHS will Paperwork Reduction Act
‘‘significant regulatory action’’ as an use an RFA threshold of at least a 3
action that is likely to result in a rule: percent impact on at least 5 percent of The Paperwork Reduction Act of 1995
(1) Having an annual effect on the small entities. (44 U.S.C. 3507(d)) requires that OMB
economy of $100 million or more in any For purposes of the RFA, HHS approve all collections of information
1 year, or adversely and materially considers all health care providers to be by a federal agency from the public
affecting a sector of the economy, small entities either by meeting the before they can be implemented. This
productivity, competition, jobs, the Small Business Administration (SBA) proposed rule is projected to have no
environment, public health or safety, or size standard for a small business, or by impact on current reporting and
State, local, or Tribal governments or being a nonprofit organization that is recordkeeping burden for manufacturers
communities (also referred to as not dominant in its market. The current under the 340B Program. This proposed
‘‘economically significant’’); (2) creating SBA size standard for health care rule would result in no new reporting
a serious inconsistency or otherwise providers ranges from annual receipts of burdens. Comments are welcome on the
interfering with an action taken or $7 million to $35.5 million. As of accuracy of this statement.
planned by another agency; (3) January 1, 2017, over 12,000 covered George Sigounas,
materially altering the budgetary entities participate in the 340B Program,
Administrator, Health Resources and Services
impacts of entitlement grants, user fees, which represent safety-net health care Administration.
or loan programs or the rights and providers across the country. HHS has
Approved: August 16, 2017.
obligations of recipients thereof; or (4) determined, and the Secretary certifies,
raising novel legal or policy issues that this proposed rule will not have a Thomas E. Price,
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
arising out of legal mandates, the significant impact on the operations of Secretary, Department of Health and Human
President’s priorities, or the principles a substantial number of small Services.
set forth in the Executive Order. A manufacturers; therefore, we are not [FR Doc. 2017–17633 Filed 8–17–17; 11:15 am]
regulatory impact analysis (RIA) must preparing an analysis of impact for this BILLING CODE 4165–15–P
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Document Created: 2017-08-19 00:44:31
Document Modified: 2017-08-19 00:44:31
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking; further delay of effective date. | |
| Dates | Submit comments on or before September 20, 2017. | |
| Contact | CAPT Krista Pedley, Director, OPA, HSB, HRSA, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857, or by telephone at 301-594-4353. | |
| FR Citation | 82 FR 39553 | |
| RIN Number | 0906-AB11 |
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