As used in this subpart:

(a) "Public Health Service" means the Office of the Assistant Secretary for Health, Health Resources and Services Administration, National Institutes of Health, Centers for Disease Control, Alcohol, Drug Abuse and Mental Health Administration, Food and Drug Administration, and all of their constituent agencies.

(b) "Secretary" means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

(c) "Program funds" means (1) Federal funds provided through grant or contract to support a program or project covered by § 50.501, and (2) any non-Federal funds that are required as a condition of such grant or contract to be expended to carry out such program or project.

(d) "Provider" means one who furnishes medical or pharmaceutical services or supplies for which program funds may be expended under any of the programs or projects described in § 50.501.

(e) "Acquisition cost" means the price generally and currently paid by providers for a drug marketed or sold by a particular formulator or labeler in the package size of drug most frequently purchased by providers, as determined by the Secretary on the basis of drug price information furnished by the Department.

[40 FR 34514, Aug. 15, 1975, as amended at 49 FR 38109, Sept. 27, 1984]

§ 50.503 Policy.

It is the policy of the Secretary that program funds which are utilized for the acquisition of drugs be expended in the most economical manner feasible. In furtherance of this policy, the Secretary has established, in 45 CFR Part 19, a procedure for determining

the Maximum Allowable Cost for drugs which are purchased with program funds.

§ 50.504 Allowable cost of drugs.

(a) The maximum amount which may be expended from program funds for the acquisition of any drug shall be the lowest of

(1) The maximum allowable cost (MAC) of the drug, if any, established in accordance with 45 CFR Part 19, plus a dispensing fee determined by the Secretary in accordance with paragraph (b) of this section, to be reasonable;

(2) The acquisition cost of the drug plus a dispensing fee determined by the Secretary, in accordance with paragraph (b) of this section, to be reasonable; or

(3) The provider's usual and customary charge to the public for the drug; Provided, That the MAC established for any drug shall not apply to a brand of that drug prescribed for a patient which the prescriber has certified, in accordance with paragraph (c) of this section, is medically necessary for that patient; And Provided further, That where compensation for drug dispensing is included in other costs allowable under the applicable program statute and regulations, the terms and conditions of the grant or contract, and the applicable cost principles prescribed in 45 CFR Part 74, no separate dispensing fee will be recognized.

(b) In determining whether a dispensing fee is reasonable, the Secretary will take into account:

(1) Cost components such as overhead, professional services, and profits,

(2) Payment practices of third-party payment organizations, including other Federal programs such as Titles XVIII and XIX of the Social Security Act; and

(3) Any surveys by States, universities or others of costs of pharmacy operations and the fees charged in the particular area.

(c) A certification by a prescriber, pursuant to paragraph (a) of this section, that a brand of drug is medically necessary for a particular patient shall

bodies approved for such purpose by the Secretary of Education, and any teaching hospital which has higher learning among its purposes and functions and which has a formal affiliation with an accredited school of medicine and a full-time academic medical staff holding faculty status in such school of medicine.

"Secretary" means the Secretary of Health and Human Services or his or her designee.

§ 51a.3 Who is eligible to apply for Federal funding?

Any public or private entity including an Indian tribe or tribal organization (as those terms are defined at 25 U.S.C. 450b) is eligible to apply for Federal funding for a special project of regional or national significance; genetic disease testing, counseling, and information project; comprehensive hemophilia diagnostic and treatment center; or for a special maternal and child health improvement project. Only public or nonprofit private institutions of higher learning may apply for training grants. Only public or nonprofit institutions of higher learning and public or private nonprofit agencies engaged in research or programs relating to maternal and child health and crippled children's services programs may apply for grants, contracts or jointly financed cooperative agreements for research in maternal and child health services or crippled children's services.

§ 51a.4 How is application made for Federal funding?

The application must include a budget and narrative plan of the manner in which the project has met, or plans to meet, each of the requirements prescribed by the Secretary. The plan must describe the project in sufficient detail to identify clearly the nature, need, and specific objectives of, and methodology for carrying out, the project. Since the Department anticipates a limited number of renewals, the application must include (except for research projects described at the end of this paragraph) a description of the project's past attempts and cur

rent plans to secure other sources of funding.

By their very nature, research projects are generally not continuing activities and do not generate reimbursement. They are therefore not included under the requirement in this paragraph to provide information on other sources of funding.

(Approved by the Office of Management and Budget under control number 09150050)

§ 51a.5 What criteria will DHHS use to decide which projects to fund?

(a) The Secretary will determine the allocation of funds available under section 502(a) of the Act for each of the activities described in § 51a.1.

(b) Within the limit of funds determined by the Secretary to be available for each of the activities described in § 51a.1, the Secretary may award Federal funding for projects under this part to applicants which will, in his or her judgment, best promote the purpose of Title V of the Social Security Act taking the following factors equally into account:

(1) The quality of the project plan or methodology.

(2) The need for the services, research, or training.

(3) The cost-effectiveness of the proposed project relative to the number of persons proposed to be benefitted, served or trained, taking into consideration, where relevant, whether the proposed project is urban or rural and the special circumstances associated with providing care or training in various areas.

(4) The extent to which the project will contribute to the advancement of maternal and child health and crippled children's services.

(5) The extent to which rapid and effective use of grant funds will be made by the project.

(6) The effectiveness of procedures to collect the cost of care and services from third-party payment sources (including government agencies) which are authorized or under legal obligation to make such payments for any service (including diagnostic, preventive and treatment services).

(7) The extent to which the project will be integrated with the administra

tion of the Maternal and Child Health Services block grants and other block grants made to the appropriate State(s).

(8) The soundness of the project's management, considering the qualifications of the staff of the proposed project and the applicant's facilities and resources.

§ 51a.6 What confidentiality requirements must be met?

All information as to personal facts and circumstances obtained by the project's staff about recipients of services shall be held confidential, and shall not be disclosed without the individual's consent except as may be otherwise required by applicable law or as may be necessary to provide for medical audits by the Secretary with appropriate safeguards for confidentiality of patient records. Otherwise, information may be disclosed only in summary, statistical, or other form which does not identify particular individuals.

§ 51a.7 What other DHHS regulations apply?

(a) Several other DHHS regulations apply to awards under this part. These include, but are not limited to:

42 CFR Part 50-Policies of general applicability:

Subpart B-Sterilization of persons in federally assisted family planning projects. Subpart C-Abortions and related medical services in federally assisted programs of the Public Health Service. Subpart E-Maximum allowable cost for drugs.

42 CFR Part 122 Health systems agencies: Subpart E-Health systems agency reviews of certain proposed uses of Federal health funds.

45 CFR Part 19-Limitations on payment or reimbursement for drugs

45 CFR Part 80-Nondiscrimination under programs receiving Federal assistance through the Department of Health and Human Services-Effectuation of Title VI of the Civil Rights Act of 1964

45 CFR Part 81-Practice and procedure for hearings under part 80 of this title

45 CFR Part 84-Nondiscrimination on the basis of handicap in programs and activities receiving or benefiting from Federal financial assistance

45 CFR Part 86-Nondiscrimination on the basis of sex in programs and activities

Sec.

51b.404 What are the confidentiality requirements?

51b.405 What information is required in the application?

51b.406 How will grant applications be evaluated and the grants awarded? 51b.407 How can grant funds be used?

Subpart E-[Reserved]

Subpart F-Grants for Research, Demonstrations, and Public Information and Education for the Prevention and Control of Venereal Disease

51b.601 To which programs does this subpart apply?

51b.602 Who is eligible for a grant under this subpart?

51b.603 What are the confidentiality requirements?

51b.604 What information is required in the application?

51b.605 How will grant applications be evaluated and the grants awarded? 51b.606 How can grant funds be used?

AUTHORITY: Secs. 317 and 318, Public Health Service Act, 92 Stat. 3574 and 3582 (42 U.S.C. 247b, 247c); sec. 1743 Pub. L. 9735, 95 Stat. 763 (31 U.S.C. 1243 note).

Islands, American Samoa, and the Trust Territory of the Pacific Islands.

§ 51b.103 What are the general application requirements?

(a) The project application shall contain a full description of the program objectives, plans, and activities. With respect to programs authorized by section 317 of the Act only, the application shall also provide, as the Secretary may require:

(1) The amount of Federal, State, and other funds obligated by the applicant in its latest annual accounting period for the provision of such program.

(2) A description of the services provided by the applicant for this accounting period covered under paragraph (a)(1) of this section.

(3) The amount of Federal funds needed by the applicant to continue providing these services.

(4) A description of any proposed changes in the provision of the services, reasons and priorities, and the amount of Federal funds needed by the applicant to make the changes.

(b) The application shall contain evidence satisfactory to the Secretary that it has been submitted, as appropriate, for action to the planning agency designated by the Secretary under Title XV of the Act (42 CFR Parts 122 and 123). These grants are subject to the intergovernmental review of Federal programs of Executive Order 12372.

(c) The application shall contain assurances that no one will be denied services because of inability to pay, and that the services are provided in a manner which preserves human dignity and maximizes acceptance.

§ 51b.104 Can personnel, supplies, and related items be provided in lieu of cash? The Secretary may reduce a grant by the amount of the fair market value of any supplies (including vaccines and other preventive agents) or equipment furnished a grant recipient when furnished at the request of the recipient. The Secretary also may reduce a grant by the amount of the pay, allowances, travel expenses, and any other costs in connection with the detail of any officer or employee of

the Government to the recipient when the detail is at the request of the recipient. The amount the grant is reduced shall be available for payment by the Secretary of the costs incurred in furnishing the supplies or equipment or in detailing personnel and shall be deemed to have been paid to the recipient.

§ 51b.105 Which other HHS Regulations apply to these grants?

Several other HHS regulations apply to grants under this part. These include, but are not limited to:

42 CFR Part 50, Subpart D-Public Health Service grant appeals procedure

45 CFR Part 16-Procedures of the Departmental Grant Appeals Board

45 CFR Part 46-Protection of human subjects

45 CFR Part 74-Administration of grants 45 CFR Part 75-Informal grant appeals procedures

45 CFR Part 76-Debarment and suspension from eligibility for financial assistance 45 CFR Part 80-Nondiscrimination under programs receiving Federal assistance through the Department of Health and Human Services effectuation of Title VI of the Civil Rights Act of 1964

45 CFR Part 81-Practice and procedure for hearings under Part 80 of this Title 45 CFR Part 84-Nondiscrimination on the basis of handicap in programs and activities receiving or benefiting from Federal financial assistance

45 CFR Part 86-Nondiscrimination on the basis of sex in education programs and activities receiving or benefiting from Federal financial assistance

45 CFR Part 91-Nondiscrimination on the basis of age in HHS programs or activities receiving Federal financial assistance

[49 FR 38109, Sept. 27, 1984]

§ 51b.106 What other conditions apply to these grants?

(a) The notice of grant award specifies how long HHS intends to support the project without requiring the project to recompete for funds. This period, called the project period, will usually be for 2 to 5 years.

(b) For budgetary and funding purposes, the project period is generally divided into 12-month intervals called budget periods. A grantee must submit a separate application to have the support continued for each subsequent budget period after the initial award.