[Federal Register Volume 85, Number 188 (Monday, September 28, 2020)]
[Proposed Rules]
[Pages 60748-60751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21358]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 51c

RIN 0906-AB25


Implementation of Executive Order 13937, ``Executive Order on 
Access to Affordable Life-Saving Medications''

AGENCY: Health Resources and Services Administration (HRSA), Department 
of Health and Human Services (HHS).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Health and Human Services (HHS) proposes to 
implement the Executive Order 13937 (Executive Order) of July 24, 2020. 
The Executive Order requires that entities funded under section 330(e) 
of the Public Health Service Act (PHS Act or the Act), whether by 
receiving a federal award or a subaward, and who also participate in 
the 340B Drug Pricing Program, must establish practices to provide 
access to insulin and injectable epinephrine to low-income patients at 
the price the health center purchased these two drugs through the 340B 
Drug Pricing Program. The Executive Order supports the improved access 
to these life-saving medications by low-income individuals who do not 
have access to affordable insulin and injectable epinephrine due to 
either lack of insurance or high cost sharing requirements. HHS is 
seeking public comment on this notice of proposed rulemaking (NPRM).

DATES: Written comments and related material to this proposed rule must 
be received to the online docket via https://www.regulations.gov on or 
before October 28, 2020.

ADDRESSES: Comments must be identified by HHS Docket No. HRSA-2020-0004 
and submitted electronically to the Federal eRulemaking Portal at 
https://www.regulations.gov. Follow the instructions for submitting 
comments. Comments and attachments will be posted to the docket 
unchanged. Because your comment will be made public, you are solely 
responsible for ensuring that your comment does not include any 
confidential information that you or a third party may not wish to be 
posted, such as medical information, your or anyone else's Social 
Security number, or confidential business information. Additionally, if 
you include your name, contact information, or other information that 
identifies you in the body of your comments, that information will be 
posted as well.

FOR FURTHER INFORMATION CONTACT: Jennifer Joseph, Director, Office of 
Policy and Program Development, Bureau of Primary Health Care, Health 
Resources and Services Administration, 5600 Fishers Lane, Rockville, 
Maryland 20857; email: [email protected]; telephone: 301-594-4300; fax: 
301-594-4997.

SUPPLEMENTARY INFORMATION:

I. Background

    On March 13, 2020, President Trump declared the ongoing Coronavirus 
Disease COVID-19 pandemic of sufficient severity and magnitude to 
warrant an emergency declaration for all states, territories, and the 
District of Columbia. With the COVID-19 emergency, many low-income 
individuals are experiencing significant economic hardship. These low-
income individuals who are dependent upon the life-saving medications 
of insulin and/or injectable epinephrine are now less able to access 
these drugs at an affordable price. On July 24, 2020, President Trump 
issued Executive Order 13937 (Executive Order), ``Executive Order on 
Access to Affordable Life-saving Medications,'' was issued to direct 
health centers that receive grants under section 330(e) of the PHS Act 
to support the improved access to certain life-saving medications by 
low income individuals. As provided in the Executive Order, it is the 
policy of the United States to enable Americans without access to 
affordable insulin and injectable epinephrine through commercial 
insurance or Federal programs, such as Medicare and Medicaid, to 
purchase these pharmaceuticals from a health center at the same price 
at which the health center acquired the medication through the 340B 
Drug Pricing Program.
    Through the Executive Order, the President directed the Secretary 
of Health and Human Services (the Secretary) to take action, to the 
extent permitted by law, to ensure all future grants available under 
section 330(e) of the PHS Act, as amended, 42 U.S.C. 254b(e), are 
conditioned upon health centers having established practices to make 
insulin and injectable epinephrine available at the discounted price 
paid by the health center grantee or sub-grantee under the 340B 
Prescription Drug Program (plus a minimal administration fee) to 
individuals with low incomes, as determined by the Secretary, who:
    (a) Have a high cost sharing requirement for either insulin or 
injectable epinephrine;
    (b) have a high unmet deductible; or
    (c) have no health care insurance.
    Under section 330(k)(3) of the Act, the Secretary may not approve 
an application for a grant under subparagraph (A) or (B) of subsection 
(e)(1) unless the Secretary determines that the entity for which the 
application is submitted meets the requirements enumerated in section 
330(k)(3)(A)-(N). Section 330(k)(3)(N) requires that ``the center has 
written policies and procedures in place to ensure the appropriate use 
of Federal funds in compliance with applicable Federal statutes, 
regulations, and the terms and conditions of the Federal award.'' 
Consistent with the Act, the HRSA would include in the Terms section of 
applicable Notices of Award (NOAs) issued under section 330(e) grant 
awards, the requirement that health center awardees comply with the 
discounted price provisions described herein.
    This proposed regulation would apply to new grants and new project 
periods for service area, new access point, supplemental, and expanded 
services awards issued under section 330(e) of the PHS Act.

II. Statutory Authority

    The statement of authority for 42 CFR part 51c continues to read 
section 330 of the PHS Act (42 U.S.C. 254b) and section 215 of the PHS 
Act, (42 U.S.C. 216).

III. Discussion of Proposed Rule

Overview

    The Executive Order was issued to support the improved access to 
certain life-saving medications for low-income individuals. HRSA is 
proposing to

[[Page 60749]]

establish a requirement for awarding new grants under section 330(e) of 
the PHS Act (42 U.S.C. 254b) that the awardee have established written 
practices to make insulin and injectable epinephrine available at or 
below the discounted price paid by the health center grantee or sub-
grantee under the 340B Drug Pricing Program (plus a minimal 
administration fee) to individuals with low incomes who: (a) Have a 
high cost sharing requirement for either insulin or injectable 
epinephrine, (b) have a high unmet deductible, or (c) have no health 
insurance. This NPRM also provides definitions relevant to this 
requirement.
1. What is the proposed requirement?
    The proposed requirement for all awards under section 330(e) is as 
follows:
    Under Executive Order 13937, issued July 24, 2020, if your health 
center, or a subrecipient, receives section 330(e) funding, is enrolled 
in the 340B Drug Pricing Program and purchases, is reimbursed, or 
provides reimbursement to other entities for insulin and injectable 
epinephrine, whether obtained using federal or non-federal funds, your 
health center must have established practices to make insulin and 
injectable epinephrine available to low-income health center patients 
(defined herein as those individuals or families with annual incomes at 
or below 350% of the Federal Poverty Guidelines)--who either have 
insurance with a high cost sharing requirement for either insulin or 
injectable epinephrine, as applicable, a high unmet deductible, or who 
have no health insurance--at or below the price the health center paid 
through the 340B Drug Pricing Program, plus a minimal administration 
fee. You are not required to charge third party payors this discounted 
price.
    Consistent with the Executive Order, this Term would only apply to 
health centers receiving section 330(e) grant funds that participate in 
the 340B Drug Pricing Program (42 U.S.C. 254b). This requirement is 
limited to increasing affordable access to insulin and injectable 
epinephrine. The requirement to make these two drug categories 
available at or below the same price paid through the 340B Drug Pricing 
Program does not apply to other 340B drugs. Health centers subject to 
this requirement would be expected to provide drugs in these two 
categories at or below the price paid through the 340B Drug Pricing 
Program to health center patients only, and further only to those 
health center patients identified as low income, as described below. An 
individual would not be considered a ``patient'' of the health center 
for this purpose if the only health care service received by the 
individual from the health center is the dispensing of a drug or drugs 
for subsequent self-administration or administration in the home 
setting. Notice Regarding Section 602 of the Veterans Health Care Act 
of 1992 Patient and Entity Eligibility, 61 FR 55,156 (Oct. 24, 1996). 
Nothing in this Program Term or the actions described in this NPRM 
prohibits or otherwise restricts a health center from setting the price 
for insulin or injectable epinephrine lower than the price the health 
center paid through the 340B Drug Pricing Program.
    This Program Term would be included on all Notices of Award issued 
to health centers receiving grants under section 330(e) of the Act.
2. How would HRSA ensure that a health center has established practices 
in order to receive an award under section 330(e) under this proposed 
rule?
    The Executive Order states that future grants under section 330(e) 
should be conditioned upon health centers or subrecipients 
participating in the 340B Drug Pricing Program, including through 
contract pharmacy arrangements, having established practices to make 
insulin and injectable epinephrine accessible at an affordable price to 
low income health center patients. To implement this requirement, all 
future awards made available under section 330(e) would include the 
requirement that health centers participating in the 340B Drug Pricing 
Program comply with the proposed regulation as described in the Program 
Term in order to receive a grant award. Specifically, these 
competitions would require health centers that receive section 330(e) 
funding and that participate in the 340B Drug Pricing Program to have 
established practices that implement the Executive Order by offering 
insulin and injectable epinephrine to patients at no more than the same 
price the health center paid through the 340B Program plus a minimal 
administration fee. Health centers that have one or more subgrantees 
that participate in the 340B Program must demonstrate such subgrantees 
have established practices to offer patients these 340B discounted 
drugs as described in this proposed rule. In particular, these 
practices would provide information to patients in an easily 
understandable format regarding their administration fees, and the low-
income, high cost sharing, and high unmet deductibles standard as 
described in this proposed regulation.
    How will the HRSA define the terms and phrases, such as ``minimal 
administration fee,'' in the Executive Order?
    HRSA proposes to define the following terms and to assist health 
centers in complying with, and implementing the Executive Order.
    1. ``Established practices'': The health center demonstrates 
through its written policies, procedures, and/or other relevant 
documents that it has established practices to offer insulin and 
injectable epinephrine at no more than the discounted price paid by the 
health center under the 340B Drug Pricing Program plus a minimal 
administration fee.
    2. ``Health center grantee or sub-grantee'': The Executive Order 
cites section 1905(l)(2)(B)(i) and (ii) of the Social Security Act, as 
amended (42 U.S.C. 1396d(l)(2)(B)(i) and (ii)). These two subparagraphs 
refer to organizations receiving an award under section 330 of the PHS 
Act (health centers) directly or as a subrecipient of grant funding. 
For purposes of this NPRM, this definition of health center grantee or 
subgrantee would be defined as organizations receiving funding under 
section 330(e) of the PHS Act.
    3. ``Minimal administration fee'': This NPRM proposes that health 
centers would be expected to offer insulin and injectable epinephrine 
at or below the price the health center paid through the 340B Program, 
plus a minimal administration fee. As the Executive Order does not 
allow any other charge for these two categories of drugs, the minimal 
administration fee would be expected to include any dispensing fee, 
counseling costs, and any other charges associated with the patient 
receiving the medication. As the fee must be ``minimal,'' consistent 
with the stated policy of the Executive Order, the administration fee 
should not create a barrier to low income patients accessing these 
drugs, and health centers should make every reasonable effort to keep 
the fee as low as possible. Health centers may consider referring to 
the Medicaid dispensing fee in their state \1\ as a comparison for what 
may be considered a minimal administration fee. Please note that when 
there is a separate fee associated with provision of the pharmaceutical 
service, such as a dispensing fee, health centers must apply a sliding 
fee discount to that fee. The Health Center Program Compliance Manual's 
Sliding Fee Discount Program

[[Page 60750]]

Chapter specifies the requirements of a health center's sliding fee 
discount program for in-scope services including pharmaceutical 
services.\2\
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    \1\ Please see https://www.medicaid.gov/medicaid/prescription-drugs/state-prescription-drug-resources/medicaid-covered-outpatient-prescription-drug-reimbursement-information-state/index.html for 
further information.
    \2\ Please see https://bphc.hrsa.gov/programrequirements/compliancemanual/chapter-9.html#titletop for further information.
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    4. ``Individuals with low incomes'': The NPRM proposes that low 
income would be defined as individuals and families with annual incomes 
of no greater than 350 percent of the Federal Poverty Guidelines.
    5. ``High cost sharing requirement'': For purposes of this NPRM, 
cost sharing refers to a patient's out-of-pocket costs, including, but 
not limited to, deductibles, coinsurance, and copayments, or similar 
charges. More specifically, a cost sharing requirement that exceeds 
twenty percent of the amount the health center is charging patients for 
the drug would be considered a high cost sharing requirement.
    6. ``High deductible'': High deductible refers to a deductible 
amount that is not less than the amount required for a high deductible 
health plan as defined in section 223(c)(2)(A) of the Internal Revenue 
Code, which, for 2020, is any plan with a deductible of at least $1,400 
for an individual or $2,800 for a family, with out-of-pocket costs not 
to exceed $6,900 for an individual and $13,800 for a family for in-
network services. For 2021, the deductible limits would remain the 
same, while the limits for out-of-pocket costs would increase to $7,000 
for self-only coverage and $14,000 for family coverage. When the 
Internal Revenue Service (IRS) updates these figures, HRSA will post 
the updated high deductible amounts on the Health Center Program 
website.
    7. ``High unmet deductible'': High unmet deductible refers to the 
amount a patient owes toward his/her high deductible at any time during 
a plan year in which the portion of the patient's high deductible for 
the plan year that has not yet been met exceeds 20% of the deductible, 
regardless of the total annual deductible of the health insurance plan.
    8. ``Health insurance Health insurance refers to private insurance, 
State and exchange plans, employer-funded plans, and coverage under 
titles XVIII, XIX, and XXI of the Social Security Act.

IV. 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). HHS has also considered E.O. 13771 and has determined that the 
associated designation will be informed by public comments received.

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, 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 rule, if finalized, will have an 
economic impact 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. Because this proposed rule 
is limited in scope to two classes of drugs that are of particular need 
and it aligns with the mission and related Health Center Program 
requirements of health centers to provide access to care for vulnerable 
individuals and families, HHS believes it will have minimal economic 
impacts on health centers. The economic impact is also expected to be 
minimal given the proposed rule is limited to only two drug products 
which are available under the 340B Program at significantly reduced 
prices. Therefore, OMB has not designated this proposed rule as 
``economically significant'' under section 3(f)(1) of the Executive 
Order 12866. HHS welcomes comments concerning the economic impact of 
this proposed rule.

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 $8 
million to $41.5 million. As of August 8, 2020, the Health Center 
Program provides grant funding under section 330(e) of the PHS Act to 
1,310 organizations to provide health care to medically underserved 
communities. 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 health centers; therefore, we are not 
preparing an analysis of impact for this RFA. HHS estimates that the 
economic impact on small entities would be minimal; therefore, we are 
not preparing an analysis of impact for the purposes of the RFA. HHS 
welcomes comments concerning the impact of this proposed rule on health 
centers.

Unfunded Mandates Reform Act

    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires

[[Page 60751]]

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 2019, that threshold level was 
approximately $164 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.'' 
This proposed 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 of 1995

    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 health centers. This proposed rule would result in no new 
reporting burdens. Comments are welcome on the accuracy of this 
statement.

List of Subjects in 42 CFR Part 51c

    Grant programs--Health, Health care, Health facilities, Reporting 
and recordkeeping requirements.

    Dated: September 21, 2020.
Thomas J. Engels,
Administrator, Health Resources and Services Administration.
    Dated: September 22, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.

    Accordingly, 42 CFR part 51c is proposed to be amended as follows:

PART 51c--GRANTS FOR COMMUNITY HEALTH CENTERS

0
1. The authority statement for part 51c is revised to read as follows:

    Authority: Sec. 330, Public Health Service Act, (42 U.S.C. 
254b); sec. 215, Public Health Service Act, (42 U.S.C. 216).

0
2. Section 51c.303 is amended by adding paragraph (w) to read as 
follows:


Sec.  51c.303   Project elements.

* * * * *
    (w)(1) Provision. To the extent that an applicant has indicated 
that it plans to distribute, either directly, or through a written 
agreement, drugs purchased through the 340B Drug Discount Program (42 
U.S.C. 256b), and to the extent that such applicant plans to make 
insulin and/or injectable epinephrine available to its patients, the 
applicant shall provide an assurance that it has established practices 
provide insulin and injectable epinephrine at or below the discounted 
price paid by the health center grantee or sub-grantee under the 340B 
Drug Pricing Program (plus a minimal administration fee) to individuals 
with low incomes, as determined by the Secretary, who have a high cost 
sharing requirement for either insulin or injectable epinephrine; have 
a high unmet deductible; or have no health insurance.
    (2) Definitions. For purposes of this paragraph (w) exclusively:
    (i) Established practices. The health center has written policies, 
procedures, and/or other relevant documents that it has established 
practices to offer insulin and injectable epinephrine at no more than 
the discounted price paid by the health center under the 340B Drug 
Pricing Program plus a minimal administration fee.
    (ii) Health center grantee or sub-grantee. Organizations receiving 
an award under section 330(e) of the PHS Act (i.e., health centers) 
directly or as subgrantees of section 330(e) grant funding.
    (iii) Minimal administration fee. The minimal administration fee 
includes any dispensing fee, counseling costs, and any other charges 
associated with the patient receiving the medication. The 
administration fee may not create a barrier to low-income patients 
accessing these drugs, and health centers should make every reasonable 
effort to keep the fee as low as possible. Health centers may refer to 
the Medicaid dispensing fee in their state as a reference for minimal 
administration fees. When there is a separate fee associated with 
provision of the pharmaceutical service, such as a dispensing fee, 
health centers must apply a sliding fee discount to that fee.
    (iv) Individuals with low incomes. Individuals and families with 
annual incomes no greater than 350 percent of the Federal Poverty 
Guidelines.
    (v) High cost sharing requirement. A cost sharing requirement that 
exceeds twenty percent of the amount the health center charges its 
patients for the drug is a high cost sharing requirement. Cost sharing 
refers to a patient's out-of-pocket costs, including, but not limited 
to, deductibles, coinsurance, and copayments, or similar charges.
    (vi) High deductible. High deductible refers to a deductible amount 
that is not less than the amount required for a high deductible health 
plan as defined in section 223(c)(2)(A) of the Internal Revenue Code, 
as implemented by the Internal Revenue Service.
    (vii) High unmet deductible. High unmet deductible refers to the 
amount a patient owes toward his/her high deductible at any time during 
a plan year in which the outstanding deductible portion exceeds 20% of 
the total deductible, regardless of the total annual deductible of the 
health insurance plan.
    (viii) Health insurance. Health insurance refers private insurance, 
State and exchange plans, employer-funded plans, and coverage under 
titles XVIII, XIX, and XXI of the Social Security Act.
    (ix) ``Patient.'' For purposes of this subsection, an individual 
would not be considered a ``patient'' of the health center for this 
purpose if the only health care service received by the individual from 
the health center is the dispensing of a drug or drugs for subsequent 
self-administration or administration in the home setting.

[FR Doc. 2020-21358 Filed 9-24-20; 4:15 pm]
BILLING CODE 4165-15-P