[Federal Register Volume 86, Number 54 (Tuesday, March 23, 2021)]
[Rules and Regulations]
[Pages 15423-15426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05981]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 51c

RIN 0906-AB25


Implementation of Executive Order on Access to Affordable Life-
Saving Medications; Final Rule; Delay of Effective Date

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

ACTION: Final rule; delay of effective date.

-----------------------------------------------------------------------

SUMMARY: This final rule implements a further delay until July 20, 
2021, of the effective date of the rule entitled ``Implementation of 
Executive Order on Access to Affordable Life-saving Medications'' 
published in the Federal Register on December 23, 2020. This rule was 
scheduled to take effect on March 22, 2021, after a delay from its 
original effective date of January 22, 2021. HHS is delaying the 
effective date of the rule to July 20, 2021, to ensure that 
implementation of the rule does not impede HHS's and health centers' 
immediate priority work, on a nationwide basis, of responding to and 
mitigating the spread of COVID-19, including ensuring widespread and 
equitable access to COVID-19 vaccines, and maintaining the delivery of 
comprehensive primary health services to medically underserved 
populations, while considering how to address administrative/
implementation issues raised by commenters and further address comments 
regarding the impact of the rule.

DATES: As of March 22, 2021, the effective date of the final rule 
published at 85 FR 83822 (December 23, 2020), which was delayed at 86 
FR 7059 (January 26, 2021), is further delayed until July 20, 2021.

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

SUPPLEMENTARY INFORMATION: 

I. Public Participation

    On March 9, 2021, the Office of the Federal Register placed a HHS 
notice of proposed rulemaking (NPRM) on file for public inspection. 
This NPRM was published in the Federal Register on March 11, 2021, 
proposing to further delay, until July 20, 2021, the effective date of 
the rule entitled ``Implementation of Executive Order on Access to 
Affordable Life-saving Medications'' published in the Federal Register 
on December 23, 2020. The comment period closed on March 14, 2021, with 
HHS receiving 198 comments on the proposed delay.
    Section 553(d) of the Administrative Procedure Act (APA) (5 U.S.C. 
551 et

[[Page 15424]]

seq.) requires that Federal agencies provide at least 30 days after 
publication of a final rule in the Federal Register before making it 
effective, unless good cause can be found not to do so. HHS finds that 
there is good cause for making this final rule effective less than 30 
days after publication in the Federal Register given that failure to do 
so would result in the final rule going into effect before the delay 
begins. Allowing for a 30-day delay between publication and the 
effective date is both unnecessary and impracticable, as it would 
undermine this rule's objective of delaying the ``Implementation of 
Executive Order on Access to Affordable Life-saving Medications'' rule 
so that HHS can fully review it for questions of law, policy, and fact.
    HHS has considered all comments in finalizing this rule, as 
outlined in Section III below, and presents a summary of all 
significant comments and HHS responses.

II. Background

    HHS published a NPRM in the Federal Register on September 28, 2020 
(85 FR 60748), and a final rule on December 23, 2020 (85 FR 83822). The 
rule, ``Implementation of Executive Order on Access to Affordable Life-
Saving Medications,'' established a new requirement directing all 
health centers receiving grants under section 330(e) of the Public 
Health Service Act (42 U.S.C. 254b(e)) that participate in the 340B 
Drug Pricing Program (340B Program) (42 U.S.C. 256b), to the extent 
that they plan to make insulin and/or injectable epinephrine available 
to their patients, to provide assurances that they have established 
practices to provide these drugs at or below the discounted price paid 
by the health center or subgrantees under the 340B Program (plus a 
minimal administration fee) to health center patients 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.
    As stated in the NPRM, consistent with Regulatory Freeze Memorandum 
and OMB Memorandum M-21-14, a delay of the ``Implementation of 
Executive Order on Access to Affordable Life-saving Medications'' rule 
will provide HHS additional time to review and consider further 
questions of fact, law, and policy the rule may raise, including 
whether revision or withdrawal of the rule may be warranted. HHS 
invited comments on the impact of the rule's administrative 
requirements, costs of new processes and procedures that would be 
necessary under the rule, the impact of the establishment of a new 
income eligibility threshold for health center operations, and the 
overall impact on care delivery and service levels for health center 
patients.
    After HHS review of submitted comments, HHS believes that this 
delay is reasonable, and will allow HHS to consider the impact that the 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' rule may have. The delay will also ensure that, 
consistent with concerns raised by commenters, implementation of the 
rule does not impede HHS's and health centers' immediate priority work, 
on a nationwide basis, of responding to and mitigating the spread of 
COVID-19, including ensuring equitable access to COVID-19 vaccines, and 
maintaining the delivery of comprehensive primary health services to 
medically underserved populations, while considering how to address 
administrative/implementation issues raised by commenters and further 
address comments regarding the impact of the rule. In addition, the 
delay will not be disruptive since the ``Implementation of Executive 
Order on Access to Affordable Life-saving Medications'' rule has not 
yet taken effect and neither HHS nor health centers have undertaken the 
administrative changes associated with implementation of the rule.

III. Public Comments and Responses

    Consistent with Regulatory Freeze Memorandum and OMB Memorandum M-
21-14, HHS requested comment on whether a delay of the final rule would 
provide HHS additional time to review and consider further questions of 
fact, law, and policy the rule may raise, including whether revision or 
withdrawal of the rule may be warranted. HHS stated that it would 
further consider comments regarding the impact of the rule's 
administrative requirements, costs of new processes and procedures that 
would be necessary under the ``Implementation of Executive Order on 
Access to Affordable Life-saving Medications'' rule, the impact of the 
establishment of a new income eligibility threshold for health center 
operations, and the overall impact on care delivery and service levels 
for health center patients.
    HHS received a total of 198 comments. Commenters identified 
themselves as individuals requiring insulin or injectable epinephrine 
and their family members, health centers, associations and 
organizations representing health centers, a professional organization, 
a diabetes research foundation, a pharmaceutical manufacturer, and 
clinical professionals. The vast majority of comments (187) favored a 
further delay in the effective date of the ``Implementation of 
Executive Order on Access to Affordable Life-saving Medications'' rule. 
Three comments opposed further delay of the effective date for the 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' rule and supported implementation of the rule, though one 
commenter opposed to a further delay also urged HHS to take steps to 
limit administrative burden to health centers. The remaining comments 
did not explicitly support or oppose the delay.
    Many commenters (175), including many health centers, primary care 
associations, and a number of other individuals and organizations, 
including a Health Care Controlled Network and a Medicaid Accountable 
Care Organization, also strongly urged that the ``Implementation of 
Executive Order on Access to Affordable Life-saving Medications'' rule 
be rescinded. Three commenters supported implementation of the 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' rule, although one of those commenters also supported a 
delay to allow health centers time to come into compliance with the 
regulation.
    All comments were considered in developing this final rule. This 
section presents a summary of all major issues raised by commenters, 
grouped by subject, as well as responses to the comments. Commenters 
used the terms ``Federally Qualified Health Centers (FQHCs)'' and 
``health centers'' interchangeably. For consistency, and as this rule 
applies to health centers funded under Section 330(e) of the PHS Act 
and not to other FQHCs this final rule uses ``health center'' 
throughout.

1. Delay Implementation Based on ``Regulatory Freeze Pending Review'' 
Memo

    Approximately 181 commenters supported the delay as consistent with 
the ``Regulatory Freeze Pending Review'' issued by the White House 
Chief of Staff on January 20, 2021. Specifically, commenters noted that 
this delay aligns with the Regulatory Freeze language to delay 
implementation ``where necessary to continue to review these questions 
of fact, law, and policy,'' and acknowledged the effort required for 
HHS to address those questions.
    Response: HHS appreciates these comments and agrees that delaying 
the

[[Page 15425]]

effective date of this final rule is consistent with the intent of the 
``Regulatory Freeze Pending Review'' memorandum.

2. Delay Implementation Based on Health Centers' Role in National 
COVID-19 Vaccination Campaign

    Approximately 169 commenters suggested that the impact of 
implementing the ``Implementation of Executive Order on Access to 
Affordable Life-Saving Medications'' rule on health centers' efforts to 
vaccinate hard-to-reach populations against COVID-19 should be 
considered as a new issue of ``fact, law, and policy,'' necessitating a 
further delay. These commenters noted that since the rule was initially 
delayed in January, health centers have been requested to perform a 
critical role in the national efforts to vaccinate hard-to-reach 
populations. Commenters stated that, in taking on this responsibility, 
health centers' staff and resources are being stretched to 
unprecedented levels, making the administrative and financial burden of 
implementing the rule even more challenging.
    Response: HHS agrees that health centers' need to focus efforts on 
expeditiously vaccinating their patient populations against COVID-19, 
including as part of the Health Center COVID-19 Vaccine Program, is a 
factor that supports a further delay in the effective date of the 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' rule. Health centers across the nation are engaging in 
mitigating and otherwise responding to the effects of COVID-19, and 
many health centers are participating in the Health Center COVID-19 
Vaccine Program, to ensure the nation's underserved communities and 
those disproportionately affected by COVID-19 are equitably vaccinated 
against COVID-19. In addition, under the American Rescue Plan Act of 
2021 (Pub. L. 117-2), HHS will soon be issuing additional funds for 
health centers to increase efforts to plan, prepare for, promote, 
distribute, administer, and track COVID-19 vaccines and to carry out a 
range of activities to further support detecting, diagnosing, tracing, 
and monitoring of COVID-19 infections necessary to mitigate the spread 
of COVID-19.

3. Delay Implementation Due to Administrative Procedure Act Concerns

    One commenter urged HHS to rescind the rule implementing Executive 
Order 13937 or delay implementation until the rule could be adequately 
considered and ``substantive shortcomings'' under the Administrative 
Procedure Act (APA) addressed. This commenter further noted that 
neither a rational basis nor legal authority was offered to target 
health centers for differential treatment nor to establish different 
policies for insulin and injectable epinephrine. In addition, the 
commenter expressed concern that the ``Implementation of Executive 
Order on Access to Affordable Life-saving Medications'' rule neither 
provided a rational basis for implementation of the new policy, nor 
addressed comments concerning the complexity and administrative 
challenges of implementation.
    Response: HHS appreciates the commenter's support for delaying the 
effective date of the rule. During the period of additional delay, HHS 
will consider whether potential APA issues were raised by the 
promulgation of the ``Implementation of Executive Order on Access to 
Affordable Life-saving Medications'' rule. HHS plans to use the delay 
period to review and consider all questions of fact, law, and policy.

4. Delay Implementation for Duration of COVID-19 Public Health 
Emergency

    One commenter requested HHS consider delaying the effective date of 
the ``Implementation of Executive Order on Access to Affordable Life-
saving Medications'' rule for the duration of the COVID-19 public 
health emergency.
    Response: HHS appreciates the commenter's support for delaying the 
effective date of the rule. This final rule will delay the effective 
date of the ``Implementation of Executive Order on Access to Affordable 
Life-saving Medications'' rule for 120 days, until July 20, 2021. HHS 
plans to use the delay period to review and consider all questions of 
fact, law, and policy that would be presented by implementation of the 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' rule, including the ongoing COVID-19 public health 
emergency. As the NPRM for this delay specified the new effective date 
of July 20, 2021, and as the duration of the COVID-19 public health 
emergency is currently unknown, HHS declines at this time to change the 
period of delay to extend through the duration of the COVID-19 public 
health emergency.

5. Delay To Allow Health Centers Time To Come Into Compliance With the 
Regulation

    One commenter, a patient with Type 1 diabetes who supported the 
underlying rule, requested HHS delay the effective date of the rule to 
allow health centers time and resources to come into compliance with 
the ``Implementation of Executive Order on Access to Affordable Life-
saving Medications'' rule. The commenter also stated that implementing 
the new rule will take substantial time and resources for health 
centers who are currently playing a critical role leading the national 
COVID-19 vaccination campaign.
    Response: HHS appreciates the commenter's support for delaying the 
effective date of the rule. HHS agrees that health centers need to 
continue to focus efforts on the critical work of responding to the 
COVID-19 public health emergency while continuing to provide essential 
comprehensive primary care to medically underserved communities. HHS 
will continue during the delay period to further consider and review 
questions of fact, law, and policy that impact the implementation of 
the final rule.

6. Opposition to Proposed Delay

    Three commenters opposed further delaying the effective date of the 
rule.
    Two of the three commenters opposed to delaying the effective date 
of the rule, including the family member of a patient with diabetes, 
cited the importance of insulin to patients with Type 1 diabetes. One 
of the three commenters opposed to delaying the effective date, 
supported implementation of the ``Implementation of Executive Order on 
Access to Affordable Life-saving Medications'' rule because access to 
affordable insulin is a top priority that can help those with Type 1 
diabetes avoid emergency room visits, inpatient admissions, other 
complications, and save lives. The commenter cited the cost of insulin 
as a substantial economic burden for those living with Type 1 diabetes, 
and stated that the ``Implementation of Executive Order on Access to 
Affordable Life-saving Medications'' rule will benefit certain health 
center patients between 200% and 350% of the Federal Poverty Guidelines 
by helping them afford the insulin they need to survive. The commenter 
also encouraged HHS to limit any administrative burden to health 
centers subject to the ``Implementation of Executive Order on Access to 
Affordable Life-saving Medications'' rule. Another of the three 
commenters, a patient of a health center, expressed concern that 
further delaying of the effective date would keep much-needed 
pharmaceuticals out of the hands of certain patients, especially those 
with disabilities.
    Response: HHS appreciates the commenters' opposition to delaying 
the effective date of the rule, as well as the concern about limiting 
administrative burden to health centers associated with

[[Page 15426]]

implementing the rule. Given the overwhelming support by other 
commenters for delaying implementation of the ``Implementation of 
Executive Order on Access to Affordable Life-saving Medications'' rule, 
HHS is finalizing this rule to delay the effective date to July 20, 
2021. HHS will use the delay period to review and consider the 
questions of fact, law, and policy posed by and the potential impact of 
the ``Implementation of Executive Order on Access to Affordable Life-
saving Medications'' rule, including on access to affordable insulin 
for health center patients, including those with Type 1 diabetes, 
patients with disabilities, and those with incomes up to 350% of the 
Federal Poverty Guidelines.
    Another commenter, a pharmaceutical manufacturer, opposed any 
further delay of the effective date, arguing that policymakers are 
operating under the erroneous assumption that 340B discounts directly 
benefit patient access to drugs. Instead, the commenter stated, covered 
entity middlemen pocket the discounts, rather than pass them on to 
patients. The commenter provided data suggesting that the markup 
charged by some covered entities on insulin is as much as 200,000%. 
However, the commenter noted that none of the covered entities examined 
were health centers. The commenter encouraged HHS to look at its own 
data to see if ``spread pricing'' on penny priced insulin is an 
appropriate policy solution for federal grantees. The commenter stated 
that they have implemented a program for 340B pass-through pricing 
where patients receive insulin at the 340B price at the point-of-sale, 
which five covered entities have instituted, as evidence that such a 
policy is operationally feasible. The commenter stated that the 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' rule would dramatically lower the cost of insulin for 
many of the most vulnerable patients in the country.
    Response: HHS appreciates the commenter's opposition to delaying 
the effective date of the rule. However, given the overwhelming support 
by other commenters for delaying implementation of the ``Implementation 
of Executive Order on Access to Affordable Life-saving Medications'' 
rule, HHS is finalizing this rule to delay the effective date to July 
20, 2021. HHS will use the delay period to review and consider the 
questions of fact, law, and policy posed by and the potential impact of 
the ``Implementation of Executive Order on Access to Affordable Life-
saving Medications'' rule, whether the rule would be likely to 
significantly lower the cost of insulin for the most vulnerable 
patients.
    As stated in the NPRM for this delay, HHS will further consider and 
review comments submitted, including those made on the substance of the 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' rule.

7. Comments on the Underlying Rule

    Most commenters raised issues that concerned the underlying rule, 
in particular, the high cost of these drugs, and the significant 
administrative costs associated with the rule. The nature of these 
comments suggests that a further delay of the ``Implementation of 
Executive Order on Access to Affordable Life-saving Medications.'' rule 
is warranted. This final rule does not address these substantive 
issues, but rather responds to concerns raised regarding the proposed 
delayed effective date. However, as stated in the NPRM, HHS will 
consider and review these comments on the substance of the underlying 
rule during the delay period.

8. Miscellaneous

    Other commenters raised a variety of issues that do not pertain 
directly to either the delay period extended by this final rule or to 
the underlying ``Implementation of Executive Order on Access to 
Affordable Life-saving Medications'' rule. This final rule does not 
address those issues as they are outside of its scope.

IV. Regulatory Impact Analysis

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when rulemaking is 
necessary, to select regulatory approaches that provide the greatest 
net benefits (including potential economic, environmental, public 
health, safety, distributive, and equity effects). In addition, under 
the Regulatory Flexibility Act, if a rule has a significant economic 
effect on a substantial number of small entities, HHS must specifically 
consider the economic effect of a rule on small entities and analyze 
regulatory options that could lessen the impact of the rule.
    The Office of Information and Regulatory Affairs has determined 
that this rule is not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866.
    HHS has determined that no resources are required to implement the 
requirements in this rule because compensation will continue to be made 
consistent with the status quo. Therefore, in accordance with the 
Regulatory Flexibility Act of 1980 (RFA), and the Small Business 
Regulatory Enforcement Act of 1996, which amended the RFA, HHS 
certifies that this rule will not have a significant impact on a 
substantial number of small entities.
    HHS has also determined that this rule does not meet the criteria 
for a major rule under the Congressional Review Act or Executive Order 
12866 and would have no major effect on the economy or federal 
expenditures. Similarly, it will not have effects on state, local, and 
tribal governments and on the private sector such as to require 
consultation under the Unfunded Mandates Reform Act of 1995. Nor on the 
basis of family well-being will the provisions of this rule 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.

V. Impact of the New Rule

    This final rule delays the effective date of the rule entitled 
``Implementation of Executive Order on Access to Affordable Life-saving 
Medications'' until July 20, 2021, to allow HHS additional opportunity 
for review and consideration of the rule. This delay is reasonable and 
will not be disruptive because the underlying rule has not yet been 
implemented or taken effect.

VI. Paperwork Reduction Act of 1995

    This rule has no information collection requirements.

Norris Cochran,
Acting Secretary, Department of Health and Human Services.
[FR Doc. 2021-05981 Filed 3-19-21; 11:15 am]
BILLING CODE 4165-15-P