HHS 340B Rebate Guidance Heads to OMB for Review

This week, HHS submitted proposed 340B Rebate Guidance to the Office of Management and Budget (OMB) for review. The proposed guidance appears to be in response to a lawsuit brought by Eli Lilly, Novartis, Sanofi, Bristol Myers Squibb, and Kalderos challenging HHS’ refusal to approve rebate models. HHS alerted the court in early May that it would be issuing this guidance.

OMB has 90 days to review federal agency notices, but the 90-day deadline is suspended if OMB has comments on the notice that it asks the authorizing agency to address. OMB distributes the notice to affected agencies and reviews agency policies to ensure they:

• are consistent with federal law and presidential priorities;
• do not conflict with other agencies’ policies or actions; and
•  adequately assess the costs and benefits of the proposal.

After OMB has cleared the documents and the authoring agency has given final review and approval, the document is published in the Federal Register.

By submitting the guidance to OMB, HHS signaled an intent to publish a Federal Register notice. Documents are often available electronically for public review before the formal publication in the Federal Register. HRSA usually asks for public comment on its Federal Register notices, so interested parties should be prepared to review and submit their thoughts to the agency on the rebate model. Covered entities are united in their opposition to the rebate model, so they hope the guidance will clarify that either the rebate model is not available to manufacturers or authorization to implement the model is subject to sufficient pro-covered-entity safeguards that the model becomes unattractive to manufacturers.

Powers will issue an alert analyzing the guidance as soon as it is published.