Collapse to view only § 10.22 - Information requests.

§ 10.20 - Administrative Dispute Resolution Panel.

The Secretary shall establish a 340B Administrative Dispute Resolution Board (Board) consisting of at least six members appointed by the Secretary with equal numbers from the Health Resources and Service Administration (HRSA), the Centers for Medicare & Medicaid Services (CMS), and the Office of the General Counsel (OGC) from which Administrative Dispute Resolution Panels (340B ADR Panel) of three members shall be selected by the HRSA Administrator (to review claims and, pursuant to authority expressly delegated through this rule by the Secretary, and to make precedential and binding final agency decisions regarding claims filed by covered entities and manufacturers). There shall also be one ex-officio, non-voting member chosen from the staff of the HRSA Office of Pharmacy Affairs (OPA). HRSA and CMS Board members shall have relevant expertise and experience in drug pricing or drug distribution. OGC Board members shall have expertise and experience in handling complex litigation.

(a) Members of the 340B ADR Panel. (1) For each case, the HRSA Administrator shall:

(i) Select from the Board three voting members, one from each of the three HHS operating or staff divisions involved (i.e., CMS, HRSA, OGC) to form a 340B ADR Panel.

(ii) Remove an individual from a 340B ADR Panel for cause; and

(iii) Appoint replacement members from the Board should an individual be unable to complete his or her duties on a 340B ADR Panel.

(2) No member of a 340B ADR Panel may have a conflict of interest, as defined in paragraph (b) of this section.

(b) Conflicts of interest. All individuals who serve on a 340B ADR Panel will be screened for conflicts of interest prior to reviewing a claim. Conflicts of interest may include:

(1) Financial interest in a party involved, a subsidiary of a party involved, or in the claim before a 340B ADR Panel;

(2) Family or close relation to a party involved; and

(3) Current or former business or employment relation to a party.

(c) Duties of the 340B ADR Panel. The 340B ADR Panel will adjudicate each claim using the procedures described §§ 10.21, 10.22, 10.23, and 10.24.

(1) Review and evaluate documents and other information submitted by covered entities and manufacturers;

(2) Request additional information or clarification of an issue from any or all parties to make a final agency decision;

(3) When necessary, evaluate a claim in a separate session from the parties involved;

(4) Consult with OPA and the parties, as appropriate and necessary, regarding any inquiries or concerns while reviewing a claim; and

(5) Issue a final agency decision on each claim and submit the written decision to the parties, and to HRSA for appropriate action.

§ 10.21 - Claims.

(a) Initiating an action. Any covered entity or manufacturer may initiate an action for monetary damages or equitable relief against a manufacturer or covered entity, as the case may be, by filing a written petition for relief with HRSA and mailing a copy of the petition with any attachments to the General Counsel or other senior official of the opposing party at its principal place of business by certified mail, return receipt requested, within three days of filing the claim. The petition should satisfy the pleading requirements of Rules 8, 10, and 11 of the Federal Rules of Civil Procedure, including setting forth the factual basis for invoking the 340B ADR Panel's jurisdiction. A claim must include all of the requirements in paragraph (d) of this section. Additional information to substantiate a claim may be submitted.

(b) 340B ADR Panel's jurisdiction. The 340B ADR Panel shall have jurisdiction to entertain any petition where the damages sought exceed $25,000 or where the equitable relief sought will likely have a value of more than $25,000 during the twelve-month period after the 340B ADR Panel's final agency decision, provided the petition asserts claims of the type set forth below.

(c) Claims permitted. The ADR process is limited to the following:

(1) Claims by a covered entity that it has been overcharged by a manufacturer for a covered outpatient drug, including claims that a manufacturer has limited the covered entity's ability to purchase covered outpatient drugs at or below the 340B ceiling price; and

(2) Claims by a manufacturer, after it has conducted an audit of a covered entity pursuant to section 340B(a)(5)(C) of the PHSA, that the covered entity has violated section 340B(a)(5)(A) of the PHSA regarding the duplicate discount prohibition, or section 340B(a)(5)(B) of the PHSA regarding the diversion prohibition, including claims that an individual does not qualify as a patient for 340B Program purposes and claims that a covered entity is not eligible for the 340B Program.

(d) Limitation of actions. (1) A covered entity or manufacturer must file a written claim for administrative dispute resolution with HRSA within 3 years of the date of the alleged violation. Any file, document, or record associated with the claim that is the subject of the ADR process must be maintained by the covered entity and manufacturer until the final agency decision is issued by the 340B ADR Panel.

(2) Notwithstanding Rules 8 and 10 of the Federal Rules of Civil Procedure, a covered entity filing a claim described in paragraph (c)(1) of this section must provide documents sufficient to demonstrate its claim that it has been overcharged by a manufacturer, along with any such other documentation as may be requested by the 340B ADR Panel.

(3) Notwithstanding Rules 8 and 10 of the Federal Rules of Civil Procedure, a manufacturer filing a claim under paragraph (c)(2) of this section must provide documents sufficient to demonstrate its claim that a covered entity has violated the prohibition on diversion or duplicate discount, along with any such documentation as may be requested by the 340B ADR Panel.

(e) Combining claims. (1) Two or more covered entities may jointly file claims of overcharges by the same manufacturer for the same drug or drugs if each covered entity that could file a claim against the manufacturer consents to the jointly filed claim, including submission of the required documentation, described in paragraph (d) of this section.

(2) An association or organization may file claims of overcharges by the same manufacturer for the same drug or drugs on behalf of multiple covered entities if each covered entity represented could file a claim against the manufacturer, is a member of the association or organization, meets the requirements described in paragraph (d) of this section, including submission of the required documentation, and each covered entity has agreed to representation by the association or organization on its behalf.

(3) A manufacturer or manufacturers may request to consolidate claims brought by more than one manufacturer against the same covered entity if each manufacturer could individually file a claim against the covered entity, consents to the filing of the consolidated claim, meets the requirements described in paragraph (d) of this section for that claim, and the 340B ADR Panel determines that such consolidation is appropriate and consistent with the goals of fairness and economy of sources. The 340B ADR Panel will not permit consolidated claims filed on behalf of manufacturers by associations or organizations representing their interests.

(4) Joinder, consolidation, and other third-party practice not referenced in this paragraph (e) shall be governed by the Federal Rules of Civil Procedure, as relevant, unless the parties and 340B ADR Panel agree otherwise.

(f) Responding to a submitted claim. Upon receipt of service of petition, the respondent must file with the 340B ADR Panel a written response to the Petition as set forth in Rule 12 or 56. The 340B ADR Panel may issue additional instructions as may be necessary or desirable governing the conduct of ADR proceedings, including instructions pertaining to deadlines for submission of additional information. If an opposing party does not respond to the petition, the 340B ADR Panel may enter a final agency decision by default in favor of the Petitioner. In a proceeding for damages, the Petitioner must still introduce evidence sufficient to support its claim for damages even though the merits have been resolved through default.

§ 10.22 - Information requests.

(a) Discovery. The 340B ADR Panel may permit a covered entity limited discovery to obtain such information and documents as may be relevant to demonstrate the merits of a claim. Such discovery shall be governed, to the extent applicable, by the Federal Rules of Civil Procedure.

(b) 340B ADR Panel information requests. Taking into account any party's request for further information, the 340B ADR Panel may request additional information from either party.

(c) Failure to respond to information requests. If the 340B ADR Panel finds that a party has failed to respond or fully respond to an information request, the 340B ADR Panel make take the following actions, including:

(1) Holding facts to have been established in the proceeding;

(2) Precluding a party from presenting or contesting a particular issue;

(3) Excluding evidence; or

(4) Judgment in the proceeding or dismissal of proceeding.

§ 10.23 - Conduct of the ADR proceeding.

(a) The 340B ADR Panel will determine, in its own discretion, the most efficient and practical form of the ADR proceeding. Unless the matter is resolved through a motion to dismiss or summary judgment under Rule 56, the 340B ADR Panel shall conduct an evidentiary hearing when there are material facts in dispute. The ADR proceeding may be conducted by video conference, in-person, or through other means.

(b) The 340B ADR Panel will determine the proper course of conduct in an ADR proceeding. Unless the parties agree otherwise and the 340B ADR Panel concurs, the Federal Rules of Civil Procedure, to the extent applicable, shall govern the proceedings.

(c) Unless the parties agree otherwise and the 340B ADR Panel concurs, the Federal Rules of Evidence shall apply to the proceedings.

(d) The 340B ADR Panel may issue additional instructions or guidance as may be necessary or desirable governing the conduct of ADR proceedings.

§ 10.24 - Final agency decision.

(a) The 340B ADR Panel will review the evidence submitted by the parties and determine if the preponderance of the evidence supports the conclusion that a violation as described in § 10.21(c)(1) or (2) has occurred.

(b) The 340B ADR Panel will prepare an agency decision based on its review and evaluation of the evidence submitted by the parties, including documents provided as required in § 10.21(d), information requests in support of a claim, and responses to a claim.

(c) The agency decision will represent the decision of a majority of the 340B ADR Panel's findings regarding the claim and discuss the findings supporting the decision.

(d) The agency decision constitutes a final agency decision that is precedential and binding on the parties involved unless invalidated by an order of a court of competent jurisdiction.

(e) The 340B ADR Panel will submit the final agency decision to all parties, and to HRSA for appropriate action regarding refunds, penalties, removal, or referral to appropriate Federal authorities.