83 FR 61563 - 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation
DEPARTMENT OF HEALTH AND HUMAN SERVICES Federal Register Volume 83, Issue 231 (November 30, 2018)
Federal Register Volume 83, Issue 231 (November 30, 2018)
| Page Range | 61563-61567 | |
| FR Document | 2018-26223 |
[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)] [Rules and Regulations] [Pages 61563-61567] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-26223] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES 42 CFR Part 10 RIN 0906-AB19 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation AGENCY: Health Resources and Services Administration, HHS. ACTION: Final rule; effective date change. ----------------------------------------------------------------------- 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.'' HHS published a final rule on January 5, 2017, that set forth the calculation of the 340B ceiling price and application of civil monetary penalties. On June 5, 2018, HHS published a final rule that delayed the effective date of the 340B ceiling price and civil monetary rule until July 1, 2019, to consider alternative and supplemental regulatory provisions and to allow for sufficient time for additional rulemaking. On November 2, 2018, HHS issued a proposed rule to solicit comments to change the effective date from July 1, 2019, to January 1, 2019, and to cease any further delay of the rule. HHS proposed this action because it determined that the January 5, 2017, final rule has been subject to extensive public comment, and had been delayed several times. HHS has considered the full range of comments on the substantive issues in the January 5, 2017, final rule. After consideration of the comments received on the effective date of the proposed rule, HHS is changing the effective date of the January 5, 2017, final rule, to January 1, 2019. DATES: The effective date of the final rule published in the Federal Register on January 5, 2017, at 82 FR 1210, and delayed March 6, 2017 at 82 FR 12508, March 20, 2017 at 82 FR 14332, May 19, 2017 at 82 FR 22893, September 29, [[Page 61564]] 2017 at 82 FR 45511, and June 5, 2018 at 83 FR 25944, is changed to January 1, 2019. FOR FURTHER INFORMATION CONTACT: CAPT Krista Pedley, Director, Office of Pharmacy Affairs, Healthcare Systems Bureau, HRSA, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857, or by telephone at 301- 594-4353. SUPPLEMENTARY INFORMATION: I. Background HHS 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 regarding the requirement that manufacturers calculate the 340B ceiling price on a quarterly basis and how the ceiling price is to be calculated; and to establish the requirement that a manufacturer charge a $.01 (penny pricing policy) for drugs 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 NPRM and the reopening notification were considered in the development of the final rule. The provisions of that rule were to be effective March 6, 2017; however, through a series of rules, HHS delayed the effective date of the January 5, 2017, final rule until July 1, 2019 (83 FR 25943, June 5, 2018). On November 2, 2018, HHS issued a proposed rule (83 FR 55135) to cease any further delay of the January 5, 2017, final rule and to change the effective date from July 1, 2019, to January 1, 2019. HHS received a number of comments both supporting and opposing the delay. After consideration of the comments received, HHS has decided to change the effective date of the January 5, 2017, final rule to January 1, 2019. The substantive provisions included in the January 5, 2017, final rule were subject to extensive public comment, and have been delayed several times. HHS has considered the full range of comments on the substantive issues in the January 5, 2017, final rule. In previous rulemaking, delaying the effective date of the January 5, 2017, final rule, HHS stated that it ``is developing new comprehensive policies to address the rising costs of prescription drugs. These policies will address drug pricing in government programs, such as Medicare Parts B & D, Medicaid, and the 340B Program. Due to the development of these comprehensive policies, we are delaying the effective date for the January 5, 2017, final rule to July 1, 2019.'' (83 FR 25944) However, as explained in the proposed rule, HHS has determined that the finalization of the 340B ceiling price and civil monetary penalty rule will not interfere with HHS's development of these comprehensive policies. Accordingly, HHS no longer believes a delay in the effective date is necessary and is changing the effective date of the rule from July 1, 2019, to January 1, 2019. The implementation date and the effective date will be the same. II. Analysis and Responses to Public Comments In the NPRM, HHS solicited comments to change the effective date from July 1, 2019, to January 1, 2019, and cease any further delay of the rule. HHS received approximately 160 comments, which contained a number of issues from covered entities, manufacturers, and groups representing these stakeholders. In this final rule, HHS will only respond to comments related to whether HHS should change the effective date of the January 5, 2017, final rule to January 1, 2019. HHS did not consider and does not address comments that raised issues beyond the narrow scope of the NPRM, including comments related to broader policy matters. HHS has summarized the relevant comments received and provided its responses below. Comment: Some commenters urge HHS not to change the effective date to January 1, 2019, and to further delay the rule to refocus the 340B Program on its mission, and issue new reforms. Commenters also express concern that the new ceiling price system has not yet been released, substantive guidance on the system has not been issued, and stakeholders will not have had an opportunity to gain experience in the system before the enforcement mechanism for the system becomes effective. These commenters recommend that HHS delay implementation until it rolls out the new ceiling price system in a thoughtful manner. Finally, the commenters state that first issuing substantive guidance on the new pricing system would be more consistent with fundamental fairness in a civil penalty enforcement context, inasmuch as program stakeholders should understand their substantive obligations and the timeframes for compliance prior to any enforcement activity. Response: HHS does not believe that the issuance of additional guidance is needed in order to implement this final rule. Current policies under the 340B Program already provide stakeholders with sufficient guidance regarding programmatic compliance. More specifically, the January 5, 2017, final rule contains information related to the calculation of the 340B ceiling price and the imposition of CMPs against manufacturers who knowingly and intentionally overcharge a covered entity. In addition, the development of the 340B ceiling price reporting system has proceeded under a separate information collection request (ICR) process that is operational in nature and has not been contingent upon the specific provisions contained in the January 5, 2017, final rule. The ICR was submitted and approved by OMB on September 28, 2015, after a formal notice and comment process (80 FR 22207, April 21, 2015, OMB No. 0915-0327). HHS plans to release the 340B ceiling pricing reporting system shortly and HHS will communicate further information through its website. HRSA will also ensure all impacted stakeholders receive education and training to prepare to utilize the 340B ceiling price reporting system. Comment: Commenters disagree with HHS that changing the effective date of the rule is necessary. Commenters also disagree that HHS has meaningfully responded to comments or considered the full range of comments on the substantive issues in the January 5, 2017, final rule, despite the rule being delayed several times. Commenters urge HHS to fully reconsider substantive comments on the January 5, 2017, final rule as the rule contains several policies that are inconsistent with the 340B statute and imposes unnecessary costs and needless administrative burdens on manufacturers. Response: HHS has decided to change the effective date of the final rule to January 1, 2019, as the rule has been [[Page 61565]] subject to extensive public comment. HHS believes that it has had adequate time to consider comments on the substantive issues in the January 5, 2017, final rule. The rule is consistent with the 340B statute. HHS has the statutory authority under section 340B(d)(1)(B)(i)(I) of the PHSA to develop and publish through appropriate policy or regulatory issuance, the precisely defined standards and methodology for the calculation of 340B ceiling prices. HHS has undertaken the effort to issue the January 5, 2017, final rule to comply with this statutory provision. Section 340(d)(1)(B)(vi) of the PHSA also provides for the imposition of sanctions in the form of civil monetary penalties against manufacturers that knowingly and intentionally charge a covered entity a price for a 340B drug that exceeds the 340B ceiling price. HHS believes that CMPs provide a critical enforcement mechanism for HHS if manufacturers do not comply with statutory pricing obligations under the 340B Program. Comment: Some commenters express concern that HHS has not provided an adequate rationale for its change of view on the need for additional rulemaking and HHS has not released information related to the ``comprehensive policies'' that it has suggested it intends to promulgate. The commenters explain that HHS made a decision to change course and put the Final Rule into effect before it has fully analyzed and explained to the public its conclusions on key issues it identified as requiring further consideration. The commenters contend that this contradicts the deliberative rulemaking principles at the heart of the Administrative Procedures Act. Response: The effective date of the final rule, for which comments were collected multiple times, has now been delayed for almost two years. It has now been more than eight years since Congress instructed HHS to issue regulations concerning CMPs. The issues that HHS was examining are well documented in the January 5, 2017, final rule. Furthermore, HHS does not believe that a January 1, 2019, effective date will undermine the comprehensive policies under consideration within the Department to address rising drug prices. Given the significant delays, HHS feels that it would be more efficient for the rule to go into effect and assess the need for further rulemaking and guidance after the rule is in effect. Comment: Some commenters express concern that HHS has not fully considered any new comprehensive policies that will curb the rising cost of drug prices and the 340B Program's impact on those rising prices. The commenters state that in previous rulemaking, HHS has stated that it would be counterproductive to effectuate the final rule prior to a more deliberative process of considering additional or alternative drug reform measures as HHS is in the process of developing new comprehensive policies to address the rising cost of prescription drugs, not limited to the 340B Program. These comments also explain that there is no basis for HHS to suddenly move up the effective date by six months and there is no material development that rationally justifies HHS's change of view on the need for additional rulemaking. They urge HHS to further delay until additional rulemaking is completed, as opposed to specifying a date certain. Response: HHS disagrees with the commenters. HHS has issued several policies related to lowering prescription drug prices, particularly in the Medicare Program. HHS also notes that as previously discussed in other rulemaking related to this issue, HHS continues to explore other policy documents related to drug pricing in government programs, including the 340B Program. In addition, commenters have not demonstrated that the finalization of the January 5, 2017, final rule would interfere with HHS's development of these comprehensive policies. As such, HHS does not believe that any further delay is necessary and is changing the effective date of the final rule from July 1, 2019, to January 1, 2019. The effective date of the final rule has been delayed for nearly two years, which has provided affected entities more than enough time to prepare for its requirements. Comment: Several commenters urge HHS to specify that the January 5, 2017, final rule's effective date is at least two quarters after the final rule's publication in the Federal Register. These commenters raise that in the January 5, 2017, final rule, HHS explicitly noted that the implementation date would be April 1, 2017, the beginning of the next quarter thereby providing a full quarter for implementation. They believe that HHS should follow the same logic here and anticipate publication of a final rule around January 1, 2019, with implementation coinciding with the beginning of the second quarter of 2019, April 1, 2019. They contend that many companies have not completed operational and other process changes because manufacturers fully expected that HHS would revisit the rule and address the rule's significant infirmities. These commenters raise that HHS previously indicated that it would delay the January 5, 2017, final rule to July 1, 2019, and an abrupt change such as this, with fewer than 60 days to implement, makes it difficult for companies--particularly smaller manufacturers--to upgrade their operational systems in time to ensure compliance with the rule. These commenters explain that there is no precedent where the established effective date of a rule imposing substantial compliance burdens on regulated parties was accelerated. Finally, these commenters state that reducing the effective date by six months will negatively affect their ability to come into compliance, which could be compounded by the implementation of the CMP provisions. Response: Based on the review of the comments received, HHS has determined that the January 5, 2017, final rule will be effective January 1, 2019. The implementation date and the effective date will be the same. Unlike the previous rule, which was effective in the middle of a quarter, this rule is effective at the beginning of a quarter. HHS does not agree that a further delay is necessary for implementation. Manufacturers that offer 340B ceiling prices as of the quarter beginning January 1, 2019, must comply with the requirements of the January 5, 2017, final rule. HHS believes that since the January 5, 2017, final rule was issued, stakeholders have had sufficient time to adjust systems and update their policies and procedures. Comment: Some commenters urge HHS to publish the ceiling price data on a secure website shortly after January 1, 2019, because the website is essential for effective enforcement of the 340B Program. These commenters explain that entities have no way of detecting overcharges and are at the mercy of manufacturers. Response: While the ceiling price reporting system is not directly governed by this rule, HHS agrees that covered entities will be able to utilize the system to detect overcharges. As previously stated, the 340B ceiling pricing reporting system is forthcoming, and HHS will convey further updates through its website. HRSA will ensure all impacted stakeholders receive education and training on how to utilize the system. Comment: Many commenters supported changing the effective date to January 1, 2019, and stated that any other delay would be unreasonable and would continue to reward manufacturers that are flouting ceiling price requirements. The commenters urge HHS to promptly enforce the final rule in order to bring drug companies [[Page 61566]] into compliance and to ensure that 340B providers are able to ``stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services'' as Congress intended. The commenters state that the rule is entirely consistent with HHS's stated goal of addressing the issue of the rising costs of prescription drugs. These commenters also explain that CMPs are an important deterrent to manufacturers who knowingly overcharge entities and initiatives to strengthen manufacturer transparency should be supported. Response: For reasons stated above, HHS agrees with the commenters that any other delay is unreasonable and will change the effective date of the January 5, 2017, final rule, to January 1, 2019. III. Regulatory Impact Analysis HHS has examined the effects of this 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 (September 19, 1980, Pub. L. 96-354), 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 this final rule to change the effective date of the January 5, 2017, final rule from July 1, 2019, to January 1, 2019, will have an economic impact of $100 million or more in any 1 year, and is therefore not designated as an ``economically significant'' final rule under section 3(f)(1) of Executive Order 12866. The 340B Program as a whole creates significant savings for entities purchasing drugs through the program, with total purchases estimated to be $19 billion in CY 2017. This final rule to implement the January 5, 2017, final rule would codify current policies regarding calculation of the 340B ceiling price and manufacturer civil monetary penalties. HHS does not anticipate that the imposition of civil monetary penalties would result in significant economic impact. When the 2017 Rule was finalized, it was described as not economically significant. Therefore, changing the effective date of the 2017 Rule is also not likely to have an economically significant impact. Specifically, the RIA for the 2017 Rule stated that, ``[. . .]manufacturers are required to ensure they do not overcharge covered entities, and a civil monetary penalty could result from overcharging if it met the standards in this final rule. HHS envisions using these penalties in rare situations. Since the Program's inception, issues related to overcharges have been resolved between a manufacturer and a covered entity and any issues have generally been due to technical errors in the calculation. For the penalties to be used as defined in the statute and in this [2017] rule, the manufacturer overcharge would have to be the result of a knowing and intentional act. Based on anecdotal information received from covered entities, HHS anticipates that this would occur very rarely if at all.'' Since the civil penalties envisioned in the 2017 Rule were expected to be rare, changing the effective date of these civil penalties is unlikely to have an economically significant impact. Executive Order 13771 (January 30, 2017) requires that the costs associated with significant new regulations ``to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.'' This rule is not subject to the requirements of Executive Order 13771 because this rule results in no more than de minimis costs. 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 three percent impact on at least five percent of small entities. The final rule would affect drug manufacturers (North American Industry Classification System code 325412: Pharmaceutical Preparation Manufacturing). The small business size standard for drug manufacturers is 750 employees. Approximately 600 drug manufacturers participate in the Program. While it is possible to estimate the impact of the final rule on the industry as a whole, the data necessary to project changes for specific manufacturers or groups of manufacturers were not available, as HRSA does not collect the information necessary to assess the size of an individual manufacturer that participates in the 340B Program. For purposes of the RFA, HHS considers all health care providers to be small entities either by virtue of 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 healthcare providers across the country. HHS has determined, and the Secretary certifies that this 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 the purposes of this RFA. HHS estimates [[Page 61567]] that the economic impact on small entities and small manufacturers will be minimal and less than 3 percent. 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 2018, that threshold is approximately $150 million. HHS does not expect this rule to exceed the threshold. Executive Order 13132--Federalism HHS has reviewed this final rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have ``federalism implications.'' This 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.'' The proposal to rescind the June 5, 2018, final rule and make the January 5, 2017, final rule effective as of January 1, 2019, 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 final rule is projected to have no impact on current reporting and recordkeeping burden for manufacturers under the 340B Program. Changes finalized in this rule would result in no new reporting burdens. Dated: November 27, 2018. George Sigounas, Administrator, Health Resources and Services Administration. Approved: November 28, 2018. Alex M. Azar II, Secretary, Department of Health and Human Services. [FR Doc. 2018-26223 Filed 11-29-18; 8:45 am] BILLING CODE 4165-15-P
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receiving facility; the type and quantity storage, or disposal facility, either of 1910.1200; or a chemical hazard label
of the airbag waste (i.e., airbag modules which, if located in the U.S., is: consistent with the National Fire
and airbag inflators) received; and the (i) Permitted under part 270 of this Protection Association code 704);
date which it was received. Shipping chapter; (ix)–(x) [Reserved]
records and confirmations of receipt (ii) In interim status under parts 265 (xi) For airbag waste, an airbag waste
must be made available for inspection and 270 of this chapter; collection facility or a designated
and may be satisfied by routine business (iii) Authorized to manage hazardous facility subject to the requirements of
records (e.g., electronic or paper waste by a state with a hazardous waste § 261.4(j) of this chapter.
financial records, bills of lading, copies management program approved under * * * * *
of DOT shipping papers, or electronic part 271 of this chapter; [FR Doc. 2018–25892 Filed 11–29–18; 8:45 am]
confirmations of receipt). (iv) Permitted, licensed, or registered BILLING CODE 6560–50–P
(2) Once the airbag waste arrives at an by a state to manage municipal solid
airbag waste collection facility or waste and, if managed in a municipal
designated facility, it becomes subject to solid waste landfill is subject to part 258
of this chapter; DEPARTMENT OF HEALTH AND
all applicable hazardous waste HUMAN SERVICES
regulations, and the facility receiving (v) Permitted, licensed, or registered
airbag waste is considered the by a state to manage non-municipal
42 CFR Part 10
hazardous waste generator for the non-hazardous waste and, if managed in
purposes of the hazardous waste a non-municipal non-hazardous waste RIN 0906–AB19
regulations and must comply with the disposal unit, is subject to the
requirements in §§ 257.5 through 257.30 340B Drug Pricing Program Ceiling
requirements of 40 CFR part 262.
of this chapter; Price and Manufacturer Civil Monetary
(3) Reuse in vehicles of defective
(vi) A facility which: Penalties Regulation
airbag modules or defective airbag
inflators subject to a recall under the (A) Beneficially uses or reuses, or
AGENCY: Health Resources and Services
National Highway Traffic Safety legitimately recycles or reclaims its
Administration, HHS.
Administration is considered sham waste; or
(B) Treats its waste prior to beneficial ACTION: Final rule; effective date change.
recycling and prohibited under 40 CFR
261.2(g). use or reuse, or legitimate recycling or
SUMMARY: The Health Resources and
reclamation;
Services Administration (HRSA)
PART 262—STANDARDS APPLICABLE (vii) For universal waste managed
administers section 340B of the Public
TO GENERATORS OF HAZARDOUS under part 273 of this chapter, a
Health Service Act (PHSA), which is
WASTE universal waste handler or destination
referred to as the ‘‘340B Drug Pricing
facility subject to the requirements of
Program’’ or the ‘‘340B Program.’’ HHS
■ 5. The authority citation for part 262 part 273 of this chapter;
(viii) A large quantity generator under published a final rule on January 5,
continues to read as follows:
the control of the same person as the 2017, that set forth the calculation of the
Authority: 42 U.S.C. 6906, 6912, 6922– 340B ceiling price and application of
6925, 6937, 6938 and 6939g. very small quantity generator, provided
the following conditions are met: civil monetary penalties. On June 5,
(A) The very small quantity generator 2018, HHS published a final rule that
Subpart A—General
and the large quantity generator are delayed the effective date of the 340B
■ 6. Section 262.14 is amended by under the control of the same person as ceiling price and civil monetary rule
revising paragraphs (a) introductory text defined in § 260.10 of this chapter. until July 1, 2019, to consider
and (a)(5) to read as follows: ‘‘Control,’’ for the purposes of this alternative and supplemental regulatory
section, means the power to direct the provisions and to allow for sufficient
§ 262.14 Conditions for exemption for a
policies of the generator, whether by the time for additional rulemaking. On
very small quantity generator. November 2, 2018, HHS issued a
ownership of stock, voting rights, or
(a) Provided that the very small otherwise, except that contractors who proposed rule to solicit comments to
quantity generator meets all the operate generator facilities on behalf of change the effective date from July 1,
conditions for exemption listed in this a different person as defined in § 260.10 2019, to January 1, 2019, and to cease
section, hazardous waste generated by of this chapter shall not be deemed to any further delay of the rule. HHS
the very small quantity generator is not ‘‘control’’ such generators. proposed this action because it
subject to the requirements of parts 124, (B) The very small quantity generator determined that the January 5, 2017,
262 (except §§ 262.10 through 262.14) marks its container(s) of hazardous final rule has been subject to extensive
through 268, and 270 of this chapter, waste with: public comment, and had been delayed
and the notification requirements of (1) The words ‘‘Hazardous Waste’’; several times. HHS has considered the
section 3010 of RCRA and the very and full range of comments on the
small quantity generator may (2) An indication of the hazards of the substantive issues in the January 5,
accumulate hazardous waste on site contents (examples include, but are not 2017, final rule. After consideration of
without complying with such limited to, the applicable hazardous the comments received on the effective
requirements. The conditions for waste characteristic(s) (i.e., ignitable, date of the proposed rule, HHS is
exemption are as follows: corrosive, reactive, toxic); hazard changing the effective date of the
* * * * * communication consistent with the January 5, 2017, final rule, to January 1,
(5) A very small quantity generator Department of Transportation 2019.
amozie on DSK3GDR082PROD with RULES
that accumulates hazardous waste in requirements at 49 CFR part 172 subpart DATES: The effective date of the final
amounts less than or equal to the limits E (labeling) or subpart F (placarding); a rule published in the Federal Register
in paragraphs (a)(3) and (4) of this hazard statement or pictogram on January 5, 2017, at 82 FR 1210, and
section must either treat or dispose of its consistent with the Occupational Safety delayed March 6, 2017 at 82 FR 12508,
hazardous waste in an on-site facility or and Health Administration Hazard March 20, 2017 at 82 FR 14332, May 19,
ensure delivery to an off-site treatment, Communication Standard at 29 CFR 2017 at 82 FR 22893, September 29,
VerDate Sep<11>2014 16:03 Nov 29, 2018 Jkt 247001 PO 00000 Frm 00055 Fmt 4700 Sfmt 4700 E:\FR\FM\30NOR1.SGM 30NOR1](https://thefederalregister.org/doc/83_FR_61794/page/1.svg)
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into compliance and to ensure that 340B planned by another agency; (3) penalties is unlikely to have an
providers are able to ‘‘stretch scarce materially altering the budgetary economically significant impact.
federal resources as far as possible, impacts of entitlement grants, user fees, Executive Order 13771 (January 30,
reaching more eligible patients and or loan programs or the rights and 2017) requires that the costs associated
providing more comprehensive obligations of recipients thereof; or (4) with significant new regulations ‘‘to the
services’’ as Congress intended. The raising novel legal or policy issues extent permitted by law, be offset by the
commenters state that the rule is arising out of legal mandates, the elimination of existing costs associated
entirely consistent with HHS’s stated President’s priorities, or the principles with at least two prior regulations.’’
goal of addressing the issue of the rising set forth in the Executive Order. A This rule is not subject to the
costs of prescription drugs. These regulatory impact analysis (RIA) must requirements of Executive Order 13771
commenters also explain that CMPs are be prepared for major rules with because this rule results in no more than
an important deterrent to manufacturers economically significant effects ($100 de minimis costs.
who knowingly overcharge entities and million or more in any 1 year), and a The Regulatory Flexibility Act (RFA)
initiatives to strengthen manufacturer ‘‘significant’’ regulatory action is subject
transparency should be supported. to review by the Office of Management The Regulatory Flexibility Act (5
Response: For reasons stated above, and Budget (OMB). U.S.C. 601 et seq.) (RFA) and the Small
HHS agrees with the commenters that Business Regulatory Enforcement and
HHS does not believe that this final
any other delay is unreasonable and will Fairness Act of 1996, which amended
rule to change the effective date of the
change the effective date of the January the RFA, require HHS to analyze
January 5, 2017, final rule from July 1,
5, 2017, final rule, to January 1, 2019. options for regulatory relief of small
2019, to January 1, 2019, will have an
businesses. If a rule has a significant
III. Regulatory Impact Analysis economic impact of $100 million or
economic effect on a substantial number
more in any 1 year, and is therefore not
HHS has examined the effects of this of small entities, the Secretary must
designated as an ‘‘economically
final rule as required by Executive specifically consider the economic
significant’’ final rule under section effect of the rule on small entities and
Order 12866 on Regulatory Planning
and Review (September 30, 1993), 3(f)(1) of Executive Order 12866. The analyze regulatory options that could
Executive Order 13563 on Improving 340B Program as a whole creates lessen the impact of the rule. HHS will
Regulation and Regulatory Review significant savings for entities use an RFA threshold of at least a three
(January 8, 2011), the Regulatory purchasing drugs through the program, percent impact on at least five percent
Flexibility Act (September 19, 1980, with total purchases estimated to be $19 of small entities.
Pub. L. 96–354), the Unfunded billion in CY 2017. This final rule to The final rule would affect drug
Mandates Reform Act of 1995 (Pub. L. implement the January 5, 2017, final manufacturers (North American
104–4), and Executive Order 13132 on rule would codify current policies Industry Classification System code
Federalism (August 4, 1999). regarding calculation of the 340B ceiling 325412: Pharmaceutical Preparation
price and manufacturer civil monetary Manufacturing). The small business size
Executive Orders 12866, 13563, and penalties. HHS does not anticipate that standard for drug manufacturers is 750
13771 the imposition of civil monetary employees. Approximately 600 drug
Executive Orders 12866 and 13563 penalties would result in significant manufacturers participate in the
direct agencies to assess all costs and economic impact. Program. While it is possible to estimate
benefits of available regulatory When the 2017 Rule was finalized, it the impact of the final rule on the
alternatives and, if regulation is was described as not economically industry as a whole, the data necessary
necessary, to select regulatory significant. Therefore, changing the to project changes for specific
approaches that maximize net benefits effective date of the 2017 Rule is also manufacturers or groups of
(including potential economic, not likely to have an economically manufacturers were not available, as
environmental, public health and safety significant impact. HRSA does not collect the information
effects, distributive impacts, and Specifically, the RIA for the 2017 Rule necessary to assess the size of an
equity). Executive Order 13563 is stated that, ‘‘[. . .]manufacturers are individual manufacturer that
supplemental to and reaffirms the required to ensure they do not participates in the 340B Program. For
principles, structures, and definitions overcharge covered entities, and a civil purposes of the RFA, HHS considers all
governing regulatory review as monetary penalty could result from health care providers to be small entities
established in Executive Order 12866, overcharging if it met the standards in either by virtue of meeting the Small
emphasizing the importance of this final rule. HHS envisions using Business Administration (SBA) size
quantifying both costs and benefits, of these penalties in rare situations. Since standard for a small business, or for
reducing costs, of harmonizing rules, the Program’s inception, issues related being a nonprofit organization that is
and of promoting flexibility. to overcharges have been resolved not dominant in its market. The current
Section 3(f) of Executive Order 12866 between a manufacturer and a covered SBA size standard for health care
defines a ‘‘significant regulatory action’’ entity and any issues have generally providers ranges from annual receipts of
as an action that is likely to result in a been due to technical errors in the $7 million to $35.5 million. As of
rule: (1) Having an annual effect on the calculation. For the penalties to be used January 1, 2017, over 12,000 covered
economy of $100 million or more in any as defined in the statute and in this entities participate in the 340B Program,
1 year, or adversely and materially [2017] rule, the manufacturer which represent safety-net healthcare
affecting a sector of the economy, overcharge would have to be the result providers across the country. HHS has
productivity, competition, jobs, the of a knowing and intentional act. Based determined, and the Secretary certifies
amozie on DSK3GDR082PROD with RULES
environment, public health or safety, or on anecdotal information received from that this final rule will not have a
state, local, or tribal governments or covered entities, HHS anticipates that significant impact on the operations of
communities (also referred to as this would occur very rarely if at all.’’ a substantial number of small
‘‘economically significant’’); (2) creating Since the civil penalties envisioned in manufacturers; therefore, we are not
a serious inconsistency or otherwise the 2017 Rule were expected to be rare, preparing an analysis of impact for the
interfering with an action taken or changing the effective date of these civil purposes of this RFA. HHS estimates
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![Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Rules and Regulations 61567
that the economic impact on small Dated: November 27, 2018. Ambulatory Surgical Center Payment
entities and small manufacturers will be George Sigounas, Systems and Quality Reporting
minimal and less than 3 percent. Administrator, Health Resources and Services Programs’’ (hereinafter referred to as the
Administration. CY 2019 OPPS/ASC final rule with
Unfunded Mandates Reform Act Approved: November 28, 2018. comment period), there was an error
Section 202(a) of the Unfunded Alex M. Azar II, that is identified and corrected in the
Secretary, Department of Health and Human Correction of Errors section below.
Mandates Reform Act of 1995 requires
that agencies prepare a written Services. II. Summary of Errors
statement, which includes an [FR Doc. 2018–26223 Filed 11–29–18; 8:45 am]
On page 58818, we made an error in
assessment of anticipated costs and BILLING CODE 4165–15–P
the DATES section under the heading
benefits, before proposing ‘‘any rule that ‘‘Comment period.’’ We inadvertently
includes any Federal mandate that may stated that comments on the payment
result in the expenditure by State, local, DEPARTMENT OF HEALTH AND
classifications assigned to the interim
HUMAN SERVICES
and Tribal governments, in the Medicare Ambulatory Payment
aggregate, or by the private sector, of Centers for Medicare & Medicaid Classification (APC) assignments and/or
$100 million or more (adjusted annually Services status indicators of new or replacement
for inflation) in any one year.’’ In 2018, Level II Healthcare Common Procedure
that threshold is approximately $150 42 CFR Parts 416 and 419 Coding System (HCPCS) codes in the
million. HHS does not expect this rule final rule with comment period must be
to exceed the threshold. [CMS–1695–CN] received no later than 5 p.m. EST on
December 3, 2018. The corrected date is
Executive Order 13132—Federalism RIN 0938–AT30
January 2, 2019, 60 days from the date
Medicare Program: Changes to of filing for public inspection.
HHS has reviewed this final rule in
accordance with Executive Order 13132 Hospital Outpatient Prospective III. Waiver of Proposed Rulemaking
regarding federalism, and has Payment and Ambulatory Surgical Under 5 U.S.C. 553(b) of the
determined that it does not have Center Payment Systems and Quality Administrative Procedure Act (APA),
‘‘federalism implications.’’ This rule Reporting Programs; Correction the agency is required to publish a
would not ‘‘have substantial direct AGENCY: Centers for Medicare & notice of the proposed rule in the
effects on the States, or on the Medicaid Services (CMS), HHS. Federal Register before the provisions
relationship between the national ACTION: Final rule; correction.
of a rule take effect. Similarly, section
government and the States, or on the 1871(b)(1) of the Act requires the
distribution of power and SUMMARY: This document corrects an Secretary to provide for notice of the
responsibilities among the various error that appeared in the final rule with proposed rule in the Federal Register
levels of government.’’ The proposal to comment period published in the and provide a period of not less than 60
rescind the June 5, 2018, final rule and Federal Register on November 21, 2018, days for public comment. In addition,
entitled ‘‘Medicare Program: Changes to section 553(d) of the APA and section
make the January 5, 2017, final rule
Hospital Outpatient Prospective 1871(e)(1)(B)(i) mandate a 30-day delay
effective as of January 1, 2019, would
Payment and Ambulatory Surgical in effective date after issuance or
not adversely affect the following family publication of a rule. Sections 553(b)(B)
elements: Family safety, family stability, Center Payment Systems and Quality
Reporting Programs.’’ Specifically, this and 553(d)(3) of the APA provide for
marital commitment; parental rights in exceptions from the notice and
document corrects the public comment
the education, nurture, and supervision comment and delay in effective date of
period end date. The corrected date is
of their children; family functioning, the APA requirements; in cases in
January 2, 2019.
disposable income or poverty; or the which these exceptions apply, sections
DATES:
behavior and personal responsibility of 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the
youth, as determined under Section Effective date: This correction is
effective November 29, 2018. Act provide exceptions from the notice
654(c) of the Treasury and General and 60-day comment period and delay
Comment period: To be assured
Government Appropriations Act of in effective date requirements of the Act
consideration, comments on the
1999. payment classifications assigned to the as well. Section 553(b)(B) of the APA
interim APC assignments and/or status and section 1871(b)(2)(C) of the Act
Paperwork Reduction Act authorize an agency to dispense with
indicators of new or replacement Level
The Paperwork Reduction Act of 1995 II HCPCS codes in FR Doc. 2018–24243 normal rulemaking requirements for
(44 U.S.C. 3507(d)) requires that OMB of November 21, 2018 (83 FR 58818), good cause if the agency makes a
approve all collections of information must be received at one of the addresses finding that the notice and comment
by a Federal agency from the public provided in the ADDRESSES section no process is impracticable, unnecessary,
before they can be implemented. This later than 5 p.m. EST on January 2, or contrary to the public interest. In
2019. addition, both section 553(d)(3) of the
final rule is projected to have no impact
APA and section 1871(e)(1)(B)(ii) of the
on current reporting and recordkeeping FOR FURTHER INFORMATION CONTACT: Act allow the agency to avoid the 30-
burden for manufacturers under the Marjorie Baldo, (410) 786–4617. day delay in effective date where such
340B Program. Changes finalized in this SUPPLEMENTARY INFORMATION: delay is contrary to the public interest
amozie on DSK3GDR082PROD with RULES
rule would result in no new reporting and an agency includes a statement of
burdens. I. Background
support.
In FR Doc. 2018–24243 of November We believe that this correcting
21, 2018 (83 FR 58818), entitled document does not constitute a
‘‘Medicare Program: Changes to Hospital rulemaking that would be subject to
Outpatient Prospective Payment and these requirements. This correcting
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Document Created: 2018-11-30 04:35:29
Document Modified: 2018-11-30 04:35:29
| 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 | Rules and Regulations | |
| Action | Final rule; effective date change. | |
| Dates | The effective date of the final rule published in the Federal Register on January 5, 2017, at 82 FR 1210, and delayed March 6, 2017 at 82 FR 12508, March 20, 2017 at 82 FR 14332, May 19, 2017 at 82 FR 22893, September 29, 2017 at 82 FR 45511, and June 5, 2018 at 83 FR 25944, is changed to January 1, 2019. | |
| Contact | CAPT Krista Pedley, Director, Office of Pharmacy Affairs, Healthcare Systems Bureau, HRSA, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857, or by telephone at 301- 594-4353. | |
| FR Citation | 83 FR 61563 | |
| RIN Number | 0906-AB19 |
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