83822 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

42 CFR Part 51c 

RIN 0906–AB25 

Implementation of Executive Order on 

Access to Affordable Life-Saving 

Medications 

AGENCY: Health Resources and Services 

Administration (HRSA), Department of 

Health and Human Services (HHS). 

ACTION: Final rule. 

SUMMARY: This final rule implements an 

Executive Order requiring 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 that also 

participate in the 340B Drug Pricing 

Program (340B Program) must establish 

practices to provide access to insulin 

and injectable epinephrine to lowincome health center patients at the 

price the health center purchased these 

two drugs through the 340B 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. 

DATES: This final rule is effective on 

January 22, 2021. 

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: jjoseph@hrsa.gov; 

telephone: 301–594–4300; fax: 301– 

594–4997. 

SUPPLEMENTARY INFORMATION: 

I. Public Participation 

On September 28, 2020, HHS 

published a notice of proposed 

rulemaking (NPRM) in the Federal 

Register (85 FR 60748) to implement 

Executive Order 13937 (Executive 

Order) of July 24, 2020, by amending the 

regulations implementing Section 330 of 

the Public Health Service Act (PHS Act 

or the Act), to require entities funded 

under Section 330(e) of the Act to 

establish practices to provide insulin 

and injectable epinephrine to lowincome patients at the price the health 

center purchased these two drugs 

through the 340B Program. The NPRM 

provided for a 30-day comment period, 

and HHS received 226 comments. HHS 

carefully considered all comments in 

developing this rule, as outlined in 

Section V below, and presents a 

summary of all significant comments 

and HHS responses. 

II. Background 

As discussed in the NPRM, on March 

13, 2020, President Trump declared the 

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 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 Program. This final 

rule aligns with the goals of the 

President’s mandate. 

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 subgrantee 

under the 340B 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.’’ 

Through this final rule, and consistent 

with the Act, HRSA will 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 regulation applies 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. 

III. 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). 

IV. Summary of This Rule 

Overview 

This rule codifies the proposed 

requirement described in the September 

2020 NPRM implementing the 

Executive Order issued to support the 

improved access to certain life-saving 

medications for low-income 

individuals. This rule establishes 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 subgrantee under the 340B Program 

(plus a minimal administration fee) to 

health center patients 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 final rule also provides 

definitions relevant to this requirement. 

Through this final rule, the 

requirement for all grant awards under 

section 330(e) of the PHS Act 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 

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 


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Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Rules and Regulations 83823 

1Please see https://www.medicaid.gov/medicaid/ 

prescription-drugs/state-prescription-drugresources/medicaid-covered-outpatientprescription-drug-reimbursement-information-state/ 

index.html for further information. 

2Please see https://bphc.hrsa.gov/ 

programrequirements/compliancemanual/chapter9.html#titletop for further information. 

those individuals or families with 

annual incomes at or below 350 percent 

of the Federal Poverty Guidelines 

(FPG))—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 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 only applies to health centers 

receiving section 330(e) grant funds that 

participate in the 340B Program (42 

U.S.C. 254b and 256b). This 

requirement is limited to increasing 

affordable access to insulin and 

injectable epinephrine. The requirement 

to make insulin and injectable 

epinephrine available at or below the 

same price paid through the 340B 

Program does not apply to other 340B 

drugs. Health centers subject to this 

requirement are expected to provide 

drugs in these two categories at or below 

the price paid through the 340B 

Program to health center patients only, 

and only to those health center patients 

identified as low-income, as described 

below. An individual will 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 selfadministration or administration in the 

home setting. See 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 final rule 

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 Program. 

This Program Term will be included 

on all Notices of Award issued to health 

centers receiving grant funds under 

section 330(e) of the Act. 

The Executive Order states that future 

grants under section 330(e) should be 

conditioned upon health centers or 

subrecipients participating in the 340B 

Program, including through contract 

pharmacy arrangements, having 

established practices to make insulin 

and injectable epinephrine accessible at 

an affordable price to low-income 

patients. To implement this 

requirement, all future awards made 

available under section 330(e) will 

include the requirement that health 

centers participating in the 340B 

Program comply with the regulation as 

described in the Program Term in order 

to receive a grant award. Specifically, 

these funding opportunities will require 

health centers that participate in the 

340B Program to have established 

practices that implement the Executive 

Order by offering insulin and injectable 

epinephrine to low-income health 

center patients at no more than the price 

the health center paid through the 340B 

Program plus a minimal administration 

fee. In particular, these practices will 

provide information to health center 

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 regulation. 

Health centers that have one or more 

subgrantees that participate in the 340B 

Program must demonstrate such 

subgrantees have established practices 

to offer health center patients these 

340B discounted drugs as described in 

this final rule. 

Through this final rule, HRSA defines 

the following terms 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 Program plus a 

minimal administration fee. 

2. ‘‘Health center grantee or 

subgrantee’’: 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 final rule, this 

definition of health center grantee or 

subgrantee is defined as organizations 

receiving funding under section 330(e) 

of the PHS Act. 

3. ‘‘Minimal administration fee’’: This 

final rule establishes that health centers 

receiving funding under section 330(e) 

of the PHS Act are 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 is 

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 health center 

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 Chapter specifies 

the requirements of a health center’s 

sliding fee discount program for inscope services including pharmaceutical 

services.2

4. ‘‘Individuals with low incomes’’: 

This final rule defines individuals with 

low incomes 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 final rule, cost 

sharing refers to a patient’s out-ofpocket 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 its 

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 


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83824 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Rules and Regulations 

3The FPG are a federal poverty measure issued 

each year in the Federal Register by HHS. The 

guidelines are used for administrative purposes, 

such as for determining financial eligibility for 

certain federal programs. They are available at 

https://aspe.hhs.gov/poverty-guidelines. 

a patient owes toward their 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 percent of the deductible. 

8. ‘‘Health insurance’’: Health 

insurance refers to private insurance, 

State and exchange plans, employerfunded plans, and coverage under titles 

XVIII, XIX, and XXI of the Social 

Security Act. 

V. Public Comments and Responses 

HRSA received a total of 226 

comments from the public, including 

individuals requiring insulin or 

injectable epinephrine and their family 

members, associations and 

organizations representing health 

centers and other stakeholders, health 

center staff and clinical professionals, 

health insurance issuers, and 

pharmaceutical manufacturers. The vast 

majority of commenters identifying 

themselves as individuals or the family 

members of those who rely on insulin 

or injectable epinephrine (22) were in 

favor of the proposed rule, although 

several suggested the proposed rule did 

not go far enough in reducing prices of 

these two medications. Many 

commenters (175), including many 

health centers, strongly urged that the 

proposed rule either not be finalized or 

be delayed in implementation, although 

most of these comments shared in the 

Administration’s goal of ensuring access 

to these two life-saving medications. 

Most of the comments opposing 

implementation of the rule or suggesting 

delaying implementation also 

recommended changes to the language 

of the NPRM if it were to be 

implemented. 

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. Support for the Proposed Rule 

Approximately 23 commenters 

expressed support for the proposed rule. 

Commenters cited a number of reasons 

for their support, including the high 

cost of insulin and injectable 

epinephrine and concern over 

increasing costs of medications. 

Commenters also stated that lower cost 

medications lead to higher medication 

patient adherence and, as such, lower 

the costs to the overall health system. 

One commenter noted that the proposed 

rule would mostly benefit those 

between 200 percent and 350 percent of 

the FPG.3 Many of these commenters 

felt the proposed rule should be 

expanded to include more medications 

and patients beyond those served by 

health centers. 

Additionally, one commenter 

requested that HRSA include the 

proposed rule’s requirements in all 

grants establishing 340B eligibility, and 

that the proposed rule’s requirements 

should also apply to health centers’ 

contract pharmacy arrangements. 

Response: HRSA appreciates the 

commenters’ support for the rule. 

Consistent with the direction provided 

to HHS in the Executive Order, HRSA 

is not expanding this final rule beyond 

health centers receiving grants under 

Section 330(e) of the PHS Act, to drugs 

beyond insulin and injectable 

epinephrine, or otherwise beyond the 

parameters identified in the proposed 

rule. As a clarification, health centers 

utilizing contract pharmacy 

arrangements must also adhere to this 

final rule. 

2. Concerns Regarding the Proposed 

Rule’s Enforceability 

Two commenters expressed concerns 

with the proposed rule’s enforceability. 

Commenters suggested that a rule 

implementing the Executive Order 

could be easily circumvented and could 

be challenging to enforce. More 

specifically, commenters stated that 

without explicit codes for documenting 

which health centers participate in the 

340B Program, it would be difficult to 

monitor and enforce compliance. 

Another commenter suggested HRSA 

clearly identify which health centers are 

participating in the 340B Program to 

help private sector partners support the 

implementation of the proposed rule. In 

addition, the commenter stated that 

HRSA should specify methods that 

would be used to verify income and 

insurance status in order to successfully 

operate the program. 

One commenter also included 

suggestions for ensuring compliance 

and eliminating loopholes, including: 

(1) Providing receipt information for the 

monetary exchange between patients 

and providers, (2) comparing the 

manufacturer’s drug price against the 

price charged to patients, and (3) using 

incentives to ensure compliance beyond 

the loss of section 330(e) funding 

awards (e.g., loss of medical license for 

non-compliance). 

Response: HRSA appreciates these 

comments. HRSA provides oversight of 

all covered entities in the 340B Program, 

including health centers, and HRSA 

declines to add these suggested 

compliance requirements. In particular, 

the suggestion that non-compliance 

should result in the loss of a medical 

license is outside of HRSA’s purview. 

With regard to the other suggestions 

for monitoring compliance with the 

final rule, HRSA will monitor the 

ongoing implementation of this final 

rule and will make changes as 

appropriate to ensure its effective 

implementation. 

3. Final Rule Is Not Needed as the 340B 

Program Is Operating as Intended 

Approximately 52 commenters stated 

that the 340B Program is operating as 

intended when originally created and 

changes are not needed. Many of these 

commenters stated that health centers 

already provide discounted drugs to 

patients, regardless of their ability to 

pay. Commenters also noted that health 

centers are required by law to use 340B 

savings to expand access to health care 

for the underserved, and these savings 

are crucial to enabling health centers to 

offer other services to their patients in 

addition to providing discounts for 

drugs. 

One commenter called on HRSA to 

take a more holistic approach to realign 

the 340B Program with its original 

intent and scope and support health 

centers’ access to the 340 Program. 

Response: HRSA acknowledges that 

health centers use 340B Program savings 

to benefit their patient population, as 

required by the Health Center Program, 

and many health centers provide 

discounted medications to their 

patients. Consistent with the Executive 

Order, this final rule applies only to 

insulin and injectable epinephrine and 

does not address other drugs health 

centers purchase through the 340B 

Program. 

4. The Executive Order Reflects a 

Misunderstanding of Health Centers’ 

Mission and Operations 

Approximately 175 commenters 

suggested that the Executive Order, on 

which the NPRM is based, reflects 

fundamental misunderstandings about 

health centers’ mission and operations, 

and does not recognize the essential role 

that health centers play in ensuring 

access to affordable pharmaceuticals for 

medically vulnerable populations. The 

commenters expressed concern with the 


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Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Rules and Regulations 83825 

Executive Order provision that 

suggested that health centers are 

benefiting inappropriately from the 

340B Program at the expense of their 

vulnerable patients. The commenters 

argued that health centers do much 

more than pass on the 340B discount to 

their low-income patients, and often 

discount drug prices below the 340B 

price to ensure they are affordable. 

Additionally, commenters stated that all 

health centers are required to invest all 

340B savings into activities that expand 

access to care for low-income 

populations, and that health centers are 

already part of the solution to 

unaffordable drug prices, and not part of 

the problem. Commenters also stated 

that health centers are widely praised 

for their strong track record of 

compliance with both the letter and the 

spirit of the 340B statute. 

Response: The final rule implements 

the goals and intent of the Executive 

Order to make insulin and injectable 

epinephrine more affordable. HRSA 

acknowledges that health centers play a 

crucial role in providing access to 

comprehensive, high quality primary 

health care to all patients regardless of 

ability to pay. Further, HRSA is 

cognizant of health centers’ compliance 

with the 340B statute and strong track 

record of using the savings generated to 

benefit patients. HRSA values its 

partnerships with all health centers and 

commends their efforts to ensure access 

to affordable drugs for all of their 

patients. 

5. The Executive Order Reflects a 

Misunderstanding of the 340B Program 

Approximately 161 commenters 

suggested that the Executive Order on 

which the NPRM is based reflects a 

fundamental misunderstanding of the 

340B Program, and if implemented as 

written would decrease some patients’ 

access to affordable drugs. The 

commenters argued that this 

misunderstanding of 340B pricing 

would result in some patients paying 

more for insulin, dramatic fluctuations 

in insulin costs from one quarter to 

another and requiring quarterly changes 

to a patient’s prescription to keep them 

on the most affordable insulin brand 

available. 

The commenters also disagreed with 

the Executive Order’s statement that 

health centers pay only one penny for 

a month’s supply of insulin or injectable 

epinephrine. The commenters suggested 

that this statement was not universally 

true given drug pricing fluctuations, 

with prices for drugs often varying from 

one penny in one quarter to over $100 

in another quarter. These commenters 

stated that health centers cannot 

guarantee that the price of the insulin or 

injectable epinephrine that a patient 

will pay on a certain day is the exact 

340B price. This 340B price fluctuation 

from quarter to quarter can create an 

undue administrative compliance 

burden on health center staff. 

One commenter suggested that the 

drug price charged to the health center 

patient should be the average 340B drug 

price to account for the quarterly 

variations in pricing. 

Response: The rule implements the 

goals and intent of the Executive Order 

to make insulin and injectable 

epinephrine more affordable. HRSA 

recognizes that health centers have a 

strong history of compliance with the 

340B statute and that many already 

significantly discount drugs for their 

patients, either through in-house 

pharmacies or via 340B contract 

pharmacies. 

Drug prices are set quarterly based on 

prices manufacturers submit to the 

Centers for Medicare & Medicaid 

Services. Although insulin and 

injectable epinephrine prices may vary 

from quarter to quarter, the final rule 

allows health centers to offer these 

drugs at lower than the 340B price 

despite these fluctuations. Given this 

flexibility, and consistent with the 

intent of the Executive Order, HRSA 

will not change the final rule to allow 

for the averaging of 340B prices. 

6. Differences Between the Executive 

Order and NPRM 

Approximately 143 commenters noted 

that the language in the proposed rule 

departs from language in the Executive 

Order. Specifically, the proposed rule 

would allow health centers to make 

insulin and injectable epinephrine 

available ‘‘at or below’’ the price the 

health center paid through the 340B 

Program, whereas the Executive Order 

requires that health centers make such 

medications available ‘‘at the 

discounted price.’’ Commenters 

suggested that the Executive Order 

prohibits health centers from providing 

these drugs at prices below the 340B 

Ceiling Price. The commenters agreed 

with the need to allow flexibility in 

providing further discounts to patients 

but expressed concern that the 

discrepancy in language between the 

Executive Order and proposed rule 

demonstrates the inappropriateness of 

both. 

Response: HRSA intends to proceed 

with language in the proposed rule 

requiring health centers to make insulin 

and injectable epinephrine available ‘‘at 

or below’’ the price paid by the health 

center through the 340B Program. This 

final rule will allow a health center to 

provide either of these two medications 

to patients at a price below the 340B 

Price. The language in this rule is 

consistent with the intent of the 

Executive Order. 

7. Change Proposed Definition of ‘‘LowIncome’’ 

Approximately 164 commenters 

requested that HRSA change its 

proposed definition of ‘‘low-income’’ 

from 350 percent of the FPG to 200 

percent of the FPG to better align with 

definitions used by other federal 

programs and private entities. 

Commenters noted that income 

assessments are not typically conducted 

by clinical staff, and those who conduct 

the assessments do not and should not 

have access to the personal health 

information that would be required for 

them to conduct a separate income 

analysis for patients who require insulin 

or injectable epinephrine. Additionally, 

commenters stated that such staff may 

not be competent to determine which 

patients may need such drugs now or in 

the future. Commenters specifically 

argued that using a low-income 

definition different from the 200 percent 

of the FPG required by the Health 

Center Program would create significant 

burden on health center staff to 

determine eligibility for health center 

discounts differently from eligibility for 

the pricing created by the proposed rule. 

This discrepancy would also create 

potential burden when using a contract 

pharmacy, where staff may be 

unfamiliar with evaluating patient 

income and may be unwilling to do so. 

Commenters further noted HHS, the 

United States Census Bureau, and 

private groups use 200 percent of the 

FPG to define low-income for research 

purposes. Commenters stated that for 

every federal program with income 

eligibility thresholds, low-income is 

defined as 250 percent of the FPG or 

less. While the Patient Protection and 

Affordable Care Act uses a ceiling above 

350 percent to identify those eligible for 

premium tax credits on the Exchanges, 

this is not a definition of low income, 

as premium tax credits are designed for 

both lower and middle class 

individuals. Finally, commenters argued 

that a 350 percent FPG threshold could 

eliminate health centers’ ability to retain 

340B savings from privately insured 

patients due to health insurance issuers 

frequently requiring health centers to 

bill no more than their usual and 

customary (U&C) rate. While health 

centers have been successful resisting 

issuers’ attempts to define U&C rates as 

discounted rates provided to patients at 

or below 200 percent FPG, the 

commenters expressed concern that 


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83826 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Rules and Regulations 

defining low-income as 350 percent FPG 

will cover most health center patients, 

making it very difficult to argue that the 

340B price for insulin and injectable 

epinephrine is not the health center’s 

U&C rate. This change would effectively 

transfer the 340B benefit from health 

centers to private health insurance 

issuers. 

Response: HRSA intends to proceed 

with the language in the proposed rule 

requiring health centers to make insulin 

and injectable epinephrine available at 

or below the price paid by the health 

center through the 340B Program to 

health center patients that have incomes 

at or below 350 percent FPG and that 

otherwise meet the criteria described in 

this rule. While HRSA appreciates the 

feedback on the definition of ‘‘low 

income’’, we do not agree that it is too 

burdensome to implement as written. 

The language in this rule is consistent 

with the intent of the Executive Order. 

8. Clarify Eligible Patients Under the 

Rule 

Approximately 162 commenters 

requested clarification of the regulatory 

language that only those patients who 

meet the 340B patient definition are 

eligible for the 340B (or lower) price. 

Commenters argued that the regulatory 

language must clearly state that the 

health center is required to charge the 

340B price (or less) only to those lowincome individuals who meet the 

definition of ‘‘FQHC patient’’ under the 

340B Program. Without such language, 

health centers could be forced to 

provide 340B pricing (or less) to 

individuals who are not eligible to 

receive 340B-priced drugs from the 

health center. Commenters used the 

example that low-income individuals 

could demand the health center provide 

them with discounted insulin, without 

permitting the health center to assume 

responsibility for their care (a necessary 

step for 340B eligibility). In such 

situations, 340B compliance would 

require the health center to purchase the 

insulin at the regular price, while this 

regulation would require that the 

individual be charged the 340B price or 

lower—an outcome that would be both 

expensive and administratively 

burdensome for the health center. 

Commenters recommended an addition 

to the regulatory text to clarify that only 

eligible health center patients should be 

able to access these drugs at the 340B 

price. 

Response: The intent of the rule is to 

provide insulin and injectable 

epinephrine at no more than the 340B 

price to health center patients and not 

to individuals who are not health center 

patients. HRSA understands 

commenters’ concerns, and the language 

in 42 CFR 51c.303(w)(1) has been 

revised to clarify that the final rule 

applies only to ‘‘health center patients.’’ 

HRSA also notes that the NPRM states 

that a ‘‘patient’’ for purposes of this 

subsection means only health center 

patients who receive in-scope health 

center services beyond dispensing of 

drugs that are self-administered or 

administered at home. This definition is 

also being finalized in this rule. 

9. Address Potential Conflict With 

Third-Party Payor Contract Terms 

Approximately 161 commenters 

requested that HRSA add regulatory 

language ensuring that health centers 

are not forced to provide discounts to 

underinsured patients if doing so would 

violate the terms of their insurance 

contracts. These commenters noted that 

many health insurance issuers prohibit 

providers from charging patients less for 

a service or supply than the amount due 

under their deductible or cost sharing 

requirements. 

Response: HRSA acknowledges that 

health centers need to comply with the 

terms of their contracts with third-party 

payors. HRSA clarifies in the final rule 

that provision of insulin and injectable 

epinephrine at or below the 340B 

discounted price is subject to potential 

restrictions in contracts with third-party 

payors. The language of the final rule 

reflects this clarification. 

10. Change Definitions of ‘‘High Cost 

Sharing Requirement,’’ ‘‘High 

Deductible’’ and ‘‘High Unmet 

Deductible’’ 

Approximately 161 commenters 

requested HRSA clarify its definitions of 

‘‘high cost sharing requirement.’’ 

Commenters specifically noted 

confusion surrounding the definition of 

‘‘high cost sharing requirement’’ and 

asked whether it means that a lowincome patient should be charged the 

lesser of their cost sharing amount, or 

the amount they would be charged 

under the proposed rule if they were 

uninsured. In addition, two commenters 

argued that health centers already 

provide their patients with medications 

at significant discounts and are thus 

concerned about defining ‘‘high cost 

sharing requirement’’ as 20 percent of 

an already discounted price. The two 

commenters noted that it is unlikely 

that a private health insurance issuer 

would define a charge that is 20 percent 

of an already discounted price as a 

‘‘high cost sharing requirement.’’ 

Commenters requested the definition be 

rewritten to reflect that 20 percent of an 

already discounted price is not a high 

cost sharing requirement. One 

commenter requested clarification as to 

how ‘‘high cost sharing’’ would be 

calculated for a patient with an 

insurance plan that ties the patient’s 

cost sharing to a deductible or coinsurance that may change over the 

course of a plan year and suggested that 

this kind of fluctuation in cost sharing 

would require communication with 

payors and should be worked out before 

a final rule is promulgated. 

Two commenters requested that ‘‘high 

deductible’’ and ‘‘high unmet 

deductible’’ be changed to a specifically 

defined amount so that health center 

and contract pharmacy staff could 

determine eligibility from a patient’s 

insurance card. They specifically noted 

the proposed definition of ‘‘high 

deductible’’ points to a section in the 

Internal Revenue Code and that it would 

be burdensome for intake staff to 

determine if a patient has a ‘‘high 

deductible’’ or a ‘‘high unmet 

deductible’’ using this definition. One 

commenter requested further 

clarification of ‘‘high unmet 

deductible,’’ asking if once a patient 

meets 80 percent of their deductible 

they are no longer eligible for the 

proposed rules’ pricing. The commenter 

noted that, if so, the patient’s deductible 

payments would need to be tracked 

throughout the plan year and made 

available at the point of sale through the 

claims adjudication process. 

Additionally, medical claims may need 

to be factored into the unmet deductible 

amount, which could be challenging 

due to the delays in processing medical 

claims for patients with a dual 

pharmacy/medical deductible. 

Response: HRSA appreciates the 

feedback surrounding the definition of 

‘‘high cost sharing requirement.’’ The 

rule does not state that a low-income 

patient should be charged the lesser of 

their cost sharing amount or the amount 

they would be charged under the 

proposed rule if they were uninsured. 

Rather, the rule states that such patients 

should be provided access to insulin 

and injectable epinephrine at no more 

than the price at which the health center 

purchased the drug through the 340B 

program. While HRSA appreciates the 

feedback on the definition of ‘‘high cost 

sharing requirement,’’ we do not agree 

that it is too burdensome to implement 

as written. HRSA also notes that health 

centers may choose to charge their 

patients less than the discounted price 

at which the health center purchased 

the drug through the 340B Program, 

regardless of the patient’s insurance outof-pocket costs or insurance status. 

HRSA appreciates the feedback that 

the proposed rule may be difficult to 

implement for patients whose cost 


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sharing changes throughout the plan 

year. HRSA will monitor 

implementation of the final rule and 

will modify it if we determine that a 

modification is warranted. 

HRSA appreciates the feedback that it 

will be difficult for health center intake 

staff to determine eligibility for the final 

rule’s pricing on insulin and injectable 

epinephrine because the rule’s 

definition of ‘‘high deductible’’ 

references the Internal Revenue Code 

definition. As reflected in the preamble 

of the NPRM, HRSA will publish the 

Internal Revenue Code definition of 

high deductible on the Health Center 

Program website. Such eligibility 

determinations may be integrated into 

existing processes utilized by health 

centers. Furthermore, it is HRSA’s 

understanding that many insurance 

cards do print the deductible on their 

cards, and we agree that the ability to 

evaluate whether a plan has a ‘‘high 

deductible’’ based on such information 

may make evaluation less burdensome 

on health center staff. However, HRSA 

does not have the authority to require 

health insurance issuers to place 

deductible amounts on the proof of 

insurance cards they provide to 

patients. 

HRSA appreciates the feedback on the 

definition of ‘‘high unmet deductible’’ 

and the potential difficulty with 

implementing this provision of the rule. 

To clarify, HRSA does intend that once 

a patient meets 80 percent of a high 

unmet deductible, the health center 

would no longer be required to provide 

that patient with insulin or injectable 

epinephrine at the 340B price as 

described by this rule, unless such 

patient separately meets the definition 

of either having a ‘‘high cost sharing 

requirement’’ or having no insurance. 

We realize this may have the potential 

to create additional burden on health 

centers and their contract pharmacies to 

ascertain a patient’s eligibility for 

pricing under this rule. HRSA will 

monitor implementation of this final 

rule and will modify it if it is deemed 

that a modification is warranted. 

11. Clarify Definition of ‘‘Minimal 

Administration Fee’’ 

Approximately 161 commenters 

requested clarification that, as a result of 

this rule, the ‘‘minimal administration 

fee’’ for insulin and injectable 

epinephrine will differ from the fees (if 

any) associated with dispensing other 

pharmaceuticals. Commenters noted 

that this rule will create significant 

additional administrative burdens for 

health centers, beyond the costs 

regularly associated with dispensing, 

counseling, and 340B compliance. One 

commenter requested that if the 

eligibility threshold under this rule is 

not aligned with the 200 percent of the 

FPG established for discounts to health 

center services under the Health Center 

Program, that HRSA define ‘‘minimal 

administration fee’’ to include costs 

associated with dispensing, 340B 

compliance, and the additional 

administrative work required to identify 

patients. Furthermore, they requested 

that HRSA clarify that this fee is unique 

to the dispensing of insulin and 

injectable epinephrine. 

One commenter requested 

clarification that administration fees 

may include limited per prescription 

fees associated with operationalizing an 

overall 340B Program or contract 

pharmacy network. Because health 

centers often have arrangements with 

third-party vendors and/or contract 

pharmacies that include a per 

prescription fee, and such fees are often 

minimal, changes to how these fees are 

calculated and administered could 

cause patients to lose access to some 

pharmacies. 

Response: The final rule defines 

‘‘minimal administration fee’’ as a fee 

that may not create a barrier to lowincome patients’ access to insulin and 

injectable epinephrine. It would be 

inconsistent with the intent of the 

Executive Order and the rule to define 

‘‘minimal administration fee’’ in a way 

that could create a barrier to accessing 

these drugs. A definition that included 

potential costs related to compliance 

could be seen as accepting that health 

centers will charge patients a higher fee 

to purchase insulin and injectable 

epinephrine than for other 

pharmaceuticals. 

As all health centers are required to 

collect information regarding patient 

income, HRSA does not anticipate the 

need for a separate eligibility review. 

Entities participating in the 340B 

Program already manage different prices 

for 340B drugs on a quarterly basis. This 

final rule has clarified that only health 

center patients are eligible for insulin 

and injectable epinephrine at the prices 

set under this rule, and HRSA does not 

anticipate health centers incurring 

additional costs related to non-health 

center patients receiving these drugs. 

Monitoring and reporting compliance 

with this rule is not anticipated to be 

significant. 

HRSA recognizes that the minimal 

administration fee described in the rule 

does not occur with other 

pharmaceuticals, including other 340B 

drugs, where multiple fees are listed 

separately. The rule defines the term, 

and states that health centers may, but 

are not required to, charge such a 

minimal administration fee for insulin 

and injectable epinephrine. HRSA 

acknowledges that this minimal 

administration fee is unique to this rule 

and insulin and injectable epinephrine 

as covered here, and that this rule does 

not create a new term that applies to the 

340B Program beyond this rule. As 

noted in the rule, all definitions are 

provided ‘‘for purposes of this 

paragraph exclusively.’’ Therefore, 

HRSA declines to make revisions to this 

section. 

12. Clarify ‘‘Established Practices’’ 

One commenter requested that HRSA 

clarify and provide additional guidance 

on the proposed rule’s requirement for 

‘‘established practices.’’ Because not all 

covered entities have mechanisms in 

place to adjudicate 340B claims for 

uninsured or underinsured patients, the 

commenter noted that many will have to 

take affirmative steps to develop 

systems and processes to support the 

provisions of the proposed rule, which 

have cost and time implications. These 

additional administrative costs could 

lead to reduced patient access to health 

center services or discounted drugs. 

The commenter requested HRSA 

clarify that to the extent that 340B 

covered entities have existing contracts 

with third-party administrators or 

vendors regarding established practices, 

deference be given to the practices in 

those existing contracts. However, for 

those covered entities that do not have 

established practices in place, the 

commenter requested that HRSA 

provide clear guidance on how covered 

entities should notify contract 

pharmacies so that they are aware 

which patients are eligible for the 

discounted prices. 

Response: HRSA proposed a 

definition of ‘‘established practices’’ in 

the NPRM and finalizes that definition 

in this rule. We understand that some 

health centers will have to establish 

new practices to ensure compliance 

with the requirements of this rule; 

however, HRSA does not anticipate that 

the administrative costs of establishing 

such practices will be substantial. 

13. Suggested Technical Edits to (w)(1) 

One commenter suggested several 

edits to the NPRM language proposed at 

42 CFR 51c.303(w)(1). Specifically, they 

suggested that the regulatory language 

in subsection 51c.303(w)(1), as 

proposed in the NPRM, be edited to 

replace ‘‘through a written agreement’’ 

with ‘‘indirectly.’’ They argued that 

some 340B covered entities either do 

not have written agreements with 

contract pharmacies, or do not abide by 

such agreements. They further suggested 


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that ‘‘discounted price paid by the 

health center’’ be replaced with ‘‘340B 

Ceiling Price,’’ arguing that ‘‘ceiling 

price’’ be more clearly defined. They 

also suggested several typographical 

edits. 

Response: As the commenter noted, 

health centers should have written 

agreements with contract pharmacies 

used for dispensing 340B drugs. HRSA 

believes that the use of ‘‘written 

agreements’’ as proposed in the NPRM 

will provide greater clarity for health 

centers in complying with this rule. It 

is HRSA’s intent that a health center 

choosing to participate in the 340B 

Program must provide the two lifesaving medications identified in this 

rule either directly or through a written 

agreement. Other forms of ‘‘indirect’’ 

distribution of the drug would not be 

compliant with the rule. HRSA will 

monitor implementation of this final 

rule and will modify it if it is deemed 

that a modification is warranted. 

HRSA will not at this time use ‘‘340B 

Ceiling Price’’ as suggested by the 

commenter. The Executive Order 

intended for low-income patients to 

access insulin and injectable 

epinephrine at no more than the price 

paid by the health center through the 

340B Program. As it is possible that the 

health center may have paid less than 

the 340B Ceiling Price, the language 

proposed in the NPRM is finalized in 

this rule. 

HRSA appreciates the commenter’s 

identification of several typographical 

edits and accepts those suggestions, 

which are reflected in the final rule. 

14. Concern Regarding Market 

Distortions 

Two commenters expressed concern 

regarding market distortions. One 

commenter argued that the proposed 

rule could exacerbate market 

distortions, as well as create new ones. 

Another commenter noted that applying 

this policy to the insured could deflect 

costs from insurance plans to patients 

and that the policy could perpetuate a 

situation whereby patients with 

insurance may be unable to utilize the 

benefit in a meaningful way. The 

commenter argued that allowing 

patients with insurance to access 340B 

Program pricing creates a perverse 

incentive for insurance plans to 

continue shifting out-of-pocket costs for 

340B drugs to patients. They argued that 

this undermines the purpose of 

insurance, and that to the extent more 

patients remain in the deductible phase 

of the benefit for all if not most of the 

year, the health insurance issuer does 

not provide any coverage for the 

patient’s prescription. 

Response: HRSA appreciates the 

concern expressed in these comments. 

However, the purpose of the Executive 

Order and the rule is to reduce the cost 

of insulin and injectable epinephrine to 

patients. Therefore, HRSA will finalize 

the rule as described. 

15. Concern Regarding Additional 

Burden on Contract Pharmacies 

One commenter noted the NPRM 

expressly states there will be no 

additional paperwork or reporting 

burden for health centers associated 

with implementation. The commenter 

was concerned that implementation of 

the proposed rule could lead to 

additional paperwork, reporting, and 

regulatory burdens for independent 

pharmacies operating as contract 

pharmacies for health centers. The 

commenter requested clarification in the 

final rule that no additional burdens 

will be placed on contract pharmacies. 

Response: Health centers and contract 

pharmacies operate as private entities 

and make independent decisions as to 

their contracting arrangements. HRSA 

will continue to monitor the impact of 

this final rule on health centers and 

their contract pharmacy arrangements 

and will modify it if it is determined 

that a modification is warranted. 

16. Rule Is Economically Significant 

One commenter disagreed with the 

proposed rule and believed it was 

economically significant and that it 

would have an impact on small entities. 

The commenter requested that HRSA be 

required to further evaluate the costs 

and benefits of finalizing the proposed 

rule and to look at alternatives to 

implementing the rule. 

Response: This comment is addressed 

in the Regulatory Impact Analysis 

section of this final rule. 

17. Legal Sufficiency of the NPRM 

One commenter argued that the 

NPRM does not provide legal 

justification and is therefore arbitrary 

and capricious and contrary to the 

Administrative Procedure Act. The 

commenter requested that HRSA 

withdraw the NPRM. 

Response: HRSA has indicated the 

statutory authority for the NPRM and 

final rule as Section 330 of the PHS Act 

(42 U.S.C. 254b) and Section 215 of the 

PHS Act (42 U.S.C. 216), and is issuing 

the final rule pursuant to Executive 

Order 13937. HRSA disagrees with the 

commenter that the rule is arbitrary and 

capricious. HRSA stated in the NPRM 

that the ongoing Coronavirus Disease 

COVID–19 pandemic has caused 

significant hardship among many lowincome individuals and, because of this 

and consistent with the Executive 

Order, HRSA is attempting to ensure 

two life-saving medications, insulin and 

injectable epinephrine, are available at 

affordable rates. HRSA disagrees that 

the NPRM and final rule are 

inconsistent with the Administrative 

Procedure Act. 

18. Miscellaneous 

Other commenters raised a variety of 

issues that do not pertain directly to the 

implementation of Executive Order 

13937 requiring entities funded under 

Section 330(e) of the PHS Act to 

establish practices to provide access to 

insulin and injectable epinephrine to 

low-income health center patients at the 

price the health center purchased these 

two drugs through the 340B Program, 

which was the focus of the proposed 

rule. This final rule does not address 

those issues as they are outside the 

scope of the proposed rule. 

VI. Regulatory Impact Analysis 

HHS has examined the effects of this 

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 

Executive Order 13771 (‘‘Reducing 

Regulation and Controlling Regulatory 

Costs’’), and received public comments 

describing new administrative costs for 

health centers. As a result, OMB has 

determined this rule is regulatory for 

purposes of Executive Order 13771. 

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 


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4See https://data.hrsa.gov/tools/data-reporting/ 

program-data/national. 

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 

will have an economic impact of $100 

million or more in any 1 year, or 

adversely and materially affect a sector 

of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local, 

or Tribal governments or communities. 

Because this rule is limited in scope to 

two classes of drugs that are of 

particular need and it aligns with the 

mission for health centers to provide 

access to care for vulnerable individuals 

and families, HHS believes it will have 

minimal economic impact. The 

economic impact is also expected to be 

minimal given the rule is limited to only 

two drug categories which are available 

under the 340B Program at significantly 

reduced prices. Indeed, approximately 

91 percent of patients at affected health 

centers have incomes at or below 200 

percent of FPG, and thus receive 

discounts on health services. (In 

addition, health centers are required to 

reinvest any income from the 340B 

Program into patient services.) Many 

commenters noted that health centers 

already provide medications at reduced 

prices to their patients. For example, 

some health centers reported charging 

$7 for a 1-month supply of insulin for 

individuals below 200 percent of 

poverty. As discussed earlier, in the 

summary of public comments, the final 

rule leads to new administrative costs 

for health centers in association with 

new processes and procedures. There 

are approximately 1,385 health center 

awardees that could experience these 

new costs.4 HRSA estimates that, on 

average, each health center would need 

one additional full-time equivalent 

(FTE) eligibility assistance worker at 

approximately $50,000 to support 

necessary additional administrative 

processes, totaling approximately 

roughly $68,750,000. Therefore, OMB 

has not designated this rule as 

‘‘economically significant’’ under 

section 3(f)(1) of the Executive Order 

12866. HHS welcomed but received no 

public comments that demonstrated this 

rule will have an economic impact 

exceeding the threshold set by E.O. 

12866. 

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 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 the RFA. 

HHS welcomed comments concerning 

the impact of this proposed rule on 

health centers and received one 

comment on this topic. The commenter 

argued that the rule will have a 

significant economic impact on a 

substantial number of small entities. 

The commenter argued that the stress 

this rule will cause to health centers 

may result in reductions in services, 

employment, and access to life-saving 

treatment. Specifically, the commenter 

stated that the rule will have the impact 

of (1) dramatically reducing 340B 

savings for health centers, (2) likely 

increasing the cost of life-saving 

medications nationwide, and (3) 

creating enormous administrative 

burdens for health centers, specifically 

because the NPRM proposed defining 

‘‘low-income’’ as at or below 350 

percent of the FPG, a different income 

threshold than the 200 percent used by 

the Health Center Program. 

HHS acknowledges the commenter’s 

concerns. However, HHS has not 

changed its determination that the RFA 

does not apply to this rule. The 

comment did not demonstrate that a 

reduction in 340B savings would meet 

the threshold of a 3 percent impact on 

5 percent of small entities. A reduction 

in 340B savings is limited to those 

related to these two medication 

categories, and only when provided to 

low-income patients that are uninsured, 

or who have a high cost sharing 

requirement or high unmet deductible. 

The comment did not demonstrate or 

explain how this rule will increase the 

cost of medications nationwide. To the 

contrary, the rule will increase the 

access of certain low-income patients to 

affordable insulin and injectable 

epinephrine. 

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 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 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.’’ This rule would 

not adversely affect the following family 

elements: Family safety, family stability, 

marital commitment; parental rights in 

the education, nurture, and supervision 


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83830 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Rules and Regulations 

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 

rule is projected to have no impact on 

current reporting and recordkeeping 

burden for health centers. This rule 

would result in no new reporting 

burdens. HHS welcomed but did not 

receive comments that this rule would 

result in new reporting burdens for 

health centers. 

List of Subjects in 42 CFR Part 51c 

Grant programs—Health, Health care, 

Health facilities, Reporting and 

recordkeeping requirements. 

Dated: December 16, 2020. 

Thomas J. Engels, 

Administrator, Health Resources and Services 

Administration. 

Dated: December 17, 2020. 

Alex M. Azar II, 

Secretary, Department of Health and Human 

Services. 

Accordingly, by the authority vested 

in me as the Secretary of Health and 

Human Services, and for the reasons set 

forth in the preamble, 42 Code of 

Federal Regulations Part 51c is amended 

as follows: 

PART 51c—GRANTS FOR 

COMMUNITY HEALTH CENTERS 

■ 1. The authority statement for part 51c 

is revised to read as follows: 

Authority: 42 U.S.C. 254b (Sec. 330, Public 

Health Service Act); 42 U.S.C. 216 (Sec. 215, 

Public Health Service Act,). 

■ 2. Section 51c.303 is amended by 

adding paragraph (w) to read as follows: 

§ 51c.303 Project elements. 

* * * * * 

(w)(1) Provision. To the extent that an 

applicant for funding under Section 

330(e) of the Public Health Service Act 

(42 U.S.C. 254b(e)) has indicated that it 

plans to distribute, either directly, or 

through a written agreement, drugs 

purchased through the 340B Drug 

Pricing 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 to 

provide insulin and injectable 

epinephrine at or below the discounted 

price paid by the health center grantee 

or subgrantee under the 340B Drug 

Pricing 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. 

(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. Such established 

practices may reflect that provision of 

insulin and injectable epinephrine at or 

below the 340B discounted price is 

subject to potential restrictions through 

contracts with third-party payors. 

(ii) Health center grantee or 

subgrantee. 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 health center 

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-ofpocket 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 their high 

deductible at any time during a plan 

year in which the outstanding 

deductible portion exceeds 20 percent 

of the total deductible for the plan year. 

(viii) Health insurance. Health 

insurance refers to private insurance, 

State and exchange plans, employerfunded plans, and coverage under titles 

XVIII, XIX, and XXI of the Social 

Security Act. 

(ix) ‘‘Patient.’’ an individual is not be 

considered a ‘‘patient’’ of the health 

center if the only health care service 

received by the individual from the 

health center is the dispensing of a drug 

or drugs for subsequent selfadministration or administration in the 

home setting. 

[FR Doc. 2020–28483 Filed 12–22–20; 8:45 am] 

BILLING CODE 4165–15–P 

SURFACE TRANSPORTATION BOARD 

49 CFR Part 1002 

[Docket No. EP 758] 

Filing Fee Waiver Requests 

AGENCY: Surface Transportation Board. 

ACTION: Final rule. 

SUMMARY: The Surface Transportation 

Board (Board or STB) clarifies and 

updates its rules regarding requests to 

waive or reduce certain filing fees. 

DATES: This rule is effective on January 

22, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Jonathon Binet at (202) 245–0368. 

Assistance for the hearing impaired is 

available through the Federal Relay 

Service at (800) 877–8339. 

SUPPLEMENTARY INFORMATION: The 

Independent Offices Appropriations Act 

(IOAA), codified at 31 U.S.C. 9701, 

provides that each service of value 

provided by an agency to a person 

(except those on official business of the 

U.S. Government) shall be selfsustaining to the extent possible and, 

accordingly, permits agencies to 

establish fees for services provided by 

the agency. The Office of Management 

and Budget (OMB) subsequently 

established a policy of full cost recovery 

for government services under which 

agencies must assess and collect user 

fees. OMB Circular A–25, User Charges 

(July 8, 1993). Under these authorities, 

the Board’s predecessor—the Interstate 

Commerce Commission (ICC)—adopted 


jbell on DSKJLSW7X2PROD with RULES