Get to Know the Administrative Dispute Resolution Process

The Health Resources and Services Administration (HRSA) recently released a proposed rule governing the Administrative Dispute Resolution (ADR) process, an avenue for covered entities and drug manufacturers to address issues within the 340B Drug Pricing Program.

Read on to learn more about the ADR process:
What is the history of the Administrative Dispute Resolution Process? 
In 2020, the National Association of Community Health Centers (NACHC) filed a lawsuit in an effort to catalyze implementation of a 340B Administrative Dispute Resolution (ADR) through the U.S. Department of Health and Human Services.1 Under the U.S. Public Health Service Act, HHS is required to have such a process in place, but implementation of the process had been delayed.2  
More than a year after NACHC's lawsuit, HHS implemented an ADR process at the beginning of January 2021. As established, the process provided covered entities and drug manufacturers an avenue to resolve disputes regarding the 340B Drug Pricing Program such as overcharges and duplicate discounts.3
Why is the Administrative Dispute Resolution Process necessary? 
Beginning in the summer of 2020, several different drug manufacturers began restricting the shipment of 340B-priced medications to contract pharmacies. The 340B program allows community health centers, and other covered entities, to purchase outpatient medications at a discount. Health centers are required to invest all savings generated from the program back into patient care and do so by providing affordable medications and a range of services from OB/GYN to dental and behavioral health. Many health centers do not operate in-house pharmacies and rely on contract pharmacies to ensure their patients can access medications by providing additional locations and hours.  
In response to restrictions by drug manufacturers, NACHC brought a petition before the Administrative Dispute Resolution panel immediately after the ADR process was established in January of 2021. In September of this year, the ADR panel dismissed NACHC's petition citing the outcome of litigation that had already taken place.4 The ADR process was only legal avenue available to covered entities to bring claims against drug manufacturers, leaving health centers without recourse to address manufacturer restrictions.  
On November 30, 2022, the Health Resources and Services Administration released a new rule that would make changes to the way the ADR process had been structured.  Several alterations are proposed in the new rule, including shifting away from Federal Rules of Evidence and Rules of Civil Procedure, which would make the process more administrative instead of similar to a trial.5 Additional changes include composing the ADR panel entirely of 340B Program experts, adding a requirement that the parties bringing petitions have engaged in good faith efforts to resolve the dispute, restricting claims to certain issues, and creating a reconsideration process once the panel makes a decision.6 The comment period for the new rule lasts through January 30, 2023.  
[1]  Simmons, A. (2020) NACHC files suit against HHS to defend the 340B Drug Discount Program from RX Manufacturer attacks, NACHC. National Association of Community Health Centers. Available at: (Accessed: December 7, 2022). 
[2]  340B Administrative Dispute Resolution (ADR) (January, 2021) HRSA. Available at: 
[3]  Ibid.
[4]  Mason, B. (2022) NACHC statement regarding HHS dismissal of ADR resolution on 340B, NACHC. National Association of Community Health Centers. Available at: 
[5]  HRSA releases proposed rule on 340B Administrative Dispute resolution (2022) AAMC. Association of American Medical Colleges. Available at:  
[6]  Ibid.



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