00-2862. Notice Regarding HRSA Grant Requirement-Participation in the 340B Drug Pricing Program

AGENCY:

Health Resources and Services Administration, HHS.

ACTION:

Notice.

SUMMARY:

The Health Resources and Services Administration (HRSA) is announcing its decision to withdraw the proposal to impose a grant award requirement that would have required HRSA grantees listed in section 340B of the Public Health Service Act and Federally Qualified Health Center (FQHC) Look-Alikes to participate in the 340B Drug Pricing Program or provide good cause for non-participation. Instead of the proposed grant requirement, HRSA will add a statement to the Notice of Grant Award (NGA) concerning the need for grantees to determine the appropriateness of their drug purchasing practices under applicable cost principles.

FOR FURTHER INFORMATION CONTACT:

Captain Robert Staley, the Office of Drug Pricing, Bureau of Primary Health Care, Health Resources and Services Administration, 10th Floor, East West Towers, 4350 East-West Highway, Bethesda, MD 20814; Phone [phone]; Fax [phone].

SUPPLEMENTARY INFORMATION:

The proposed grant requirement for eligible HRSA grantee and FQHC Look-Alike participation in the 340B Drug Pricing Program was announced in the Federal Register at 63 FR 56656 on October 22, 1998. A period of 60 days was established to allow interested parties to submit comments. HRSA received 21 comments. In light of the concerns expressed about the potential adverse impact of the proposed grant requirement, HRSA has decided not to institute the requirement at this time. Instead, HRSA will implement another administrative option to increase participation in the 340B Drug Pricing Program: a statement in the HRSA Notice of Grant Award (NGA) encouraging those grantees not participating in the 340B Program to determine whether their drug purchasing practices meet Federal requirements regarding reasonable and cost effective purchasing. (See 42 CFR part 50, subpart E, and OMB Circulars A-122 and A-87 regarding cost principles). If grantees can obtain drugs through the Drug Pricing Program at lower cost, it would be reasonable to take advantage of such cost savings. This policy will be implemented during the fiscal year (FY) 2000 grant award cycle.

Dated: January 3, 2000.

Claude Earl Fox,

Administrator.