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thout regard to the requirements of e preceding sentence.

c. 101, Pub. L. 95-205, 91 Stat. 1461, Dec. 9, 7)

FR 13868, July 21, 1978, as amended at 44 61598, Oct. 26, 1979]

0.307 Documentation needed by programs or projects.

Federal financial participation is unṛailable for the performance of aborons or other medical procedures othwise provided for under §§ 50.304 and .306 if the program or project has aid without first having received the ertifications and documentation specied in those sections.

3 FR 4570, Feb. 2, 1978, as amended at 44 FR .598, Oct. 26, 1979]

50.308 Drugs and devices and termination of ectopic pregnancies.

Federal financial participation is vailable with respect to the cost of Irugs or devices to prevent implantaion of the fertilized ovum, and for nedical procedures necessary for the ermination of an ectopic pregnancy.

50.309 Recordkeeping requirements. Programs or projects to which this subpart applies must maintain copies of the certifications and documentation specified in §§ 50.304 and 50.306 for three years pursuant to the retention and custodial requirements for records at 45 CFR 74.20 et seq.

[43 FR 4570, Feb. 2, 1978, as amended at 44 FR 61598, Oct. 26, 1979]

$50.310 Confidentiality.

Information in the records or in the possession of programs or projects which is acquired in connection with the requirements of this subpart may not be disclosed in a form which permits the identification of an individual without the individual's consent except as may be necessary for the health of the individual or as may be necessary for the Secretary to monitor the activities of those programs or projects. In any event, any disclosure shall be subject to appropriate safeguards which will minimize the likelihood of disclosures of personal information in identifiable form.

Subpart D-Public Health Service Grant Appeals Procedure

AUTHORITY: Sec. 215, Public Health Service Act, 58 Stat. 690 (42 U.S.C. 216); 45 CFR 16.3(c).

SOURCE: 54 FR 34770, Aug. 22, 1989, unless otherwise noted.

$50.401 What is the purpose of this subpart?

This subpart establishes an informal procedure for the resolution of certain postaward grant and cooperative agreement disputes within PHS.

$50.402 To what programs do these regulations apply?

This subpart applies to all grant and cooperative agreement programs, except block grants, which are administered by the U.S. Public Health Service, including those administered by the National Institutes of Health; the Health Resources and Services Administration; the Centers for Disease Control; the Agency for Toxic Substances and Disease Registry; the Alcohol, Drug Abuse, and Mental Health Administration; the Food and Drug Administration; the Indian Health Service; the Office of the Assistant Secretary for Health (OASH); and the PHS regional offices.

§ 50.403 What is the policy basis for these procedures?

The Secretary of Health and Human Services has established a Departmental Appeals Board for the purpose of providing a fair and flexible process for the appeal of written final decisions involving certain grant and cooperative agreement programs administered by constituent agencies of the Department. The regulatory provision which establishes the circumstances under which the Board will accept an appeal (45 CFR 16.3) provides, among other things, that the appellant must have exhausted any preliminary appeal process required by regulation before a formal appeal to the Departmental Board will be allowed. These regulations provide such an informal preliminary procedure for resolution of disputes within PHS in order to preclude submission of cases to the Departmental Appeals Board before PHS has


had an opportunity to review decisions of its officials and to settle disputes with grantees.

A minimum of three employees s be appointed (one of whom shall bez ignated as chairperson) either on an hoc, case-by-case basis, or as re

§ 50.404 What disputes are covered by members of review committees these procedures?

(a) These procedures are applicable to the following adverse determinations under PHS discretionary project grants and cooperative agreements (hereinafter both referred to as grants):

(1) Termination, in whole or in part, of a grant for failure of the grantee to carry out its approved project in accordance with the applicable law and the terms and conditions of such assistance or for failure of the grantee otherwise to comply with any law, regulation, assurance, term, or condition applicable to the grant.

(2) A determination that an expenditure not allowable under the grant has been charged to the grant or that the grantee has otherwise failed to discharge its obligation to account for grant funds.

(3) A determination that a grant is void.

(4) A denial of a noncompeting continuation award under the project period system of funding where the denial is for failure to comply with the terms of a previous award.

(b) A determination subject to this subpart may not be reviewed by the review committee described in §50.405 unless an officer or employee of the agency, OASH, or the regional office has notified the grantee in writing of the adverse determination. The notification must set forth the reasons for the determination in sufficient detail to enable the grantee to respond and must inform the grantee of the opportunity for review under this subpart.

§ 50.405 What is the structure of review committees?

The head of each agency or his/her designee shall appoint review committees to review appeals of adverse determinations made by headquarters officials for programs under the jurisdiction of that agency. The Assistant Secretary for Health, or his/her designee, shall appoint review committees to review adverse determinations made by OASH officials and regional officials for programs under their jurisdiction.

such terms as may be designated. X of the members of the review com tee reviewing any given appeal ma from the office of the responsible: cial whose adverse determinatic: being appealed (e.g., project offs grants specialist, program manag grants management officer).

§ 50.406 What are the steps in the pr ess?

(a) A grantee with respect to w an adverse determination described: § 50.404(a) above has been made and desires a review of that determinat must submit a request for such revis to the head of the appropriate aga or his/her designee (or in the case of OASH program or regional office dete mination, to the Assistant Secreta for Health or his/her designee) no isk than 30 days after the written notif tion of the determination is receive except that if the grantee shows go cause why an extension of time sho be granted, the head of the appropr agency or his/her designee (or in case of an OASH program or region office determination, the Assista Secretary for Health or his/her des ignee) may grant an extension of time

(b) The request for review must clude a copy of the adverse determin tion, must identify the issue(s) in pute, and must contain a full stat ment of the grantee's position with spect to such issue(s) and the pertine facts and reasons in support of grantee's position. In addition to the required written statement, the gran ee shall provide copies of any doc

ments supporting its claim.

(c) When a request for review b been filed under this subpart with re spect to an adverse determination, E action may be taken by the awardi agency, OASH, or regional office purst ant to such determination until the re quest has been disposed of, except the the filing of the request shall not affect any authority which the agency OASH, or regional office may have suspend assistance or otherwise withhold or defer payments under

nt during proceedings under this part. This paragraph does not rere the awarding agency, OASH, or ional office to provide continuation ding during the appeal process to a ntee whose noncompeting continuon award has been denied.

1) Upon receipt of a request for rew, the head of the agency or his/her signee (or, if the adverse determinan was made in an OASH program or ional office, the Assistant Secretary · Health or his/her designee) will ke a decision as to whether the diste is reviewable under this subpart d will promptly notify the grantee d the office responsible for the adrse determination of this decision. If e head of the agency or his/her desnee (or, if applicable, the Assistant cretary for Health or his/her desnee) determines that the dispute is viewable, he/she will forward the atter to the review committee ap>inted under § 50.405.

(e) The agency, OASH, or regional ofce involved will provide the review ommittee appointed under $50.405 ith copies of all relevant background aterials (including application(s), ward(s), summary statement(s), and orrespondence) and any additional ertinent information available. These materials must be tabbed and orgaized chronologically and accompanied y an indexed list identifying each docment.

(f) The grantee shall be given an oportunity to provide the review comnittee with additional statements and ocumentation not provided in the request for review described in paragraph b) of this section. This additional subnission, which must be organized and ndexed as indicated under paragraph (e) of this section, should provide only material that is relevant to the review committee's deliberation of the issues in the case.

(g) The review committee may, at its discretion, invite the grantee and/or the agency/OASH/regional office staff to discuss the pertinent issues with the committee and to submit such additional information as the committee deems appropriate.

(h) Based on its review, the review committee will prepare a written decision to be signed by the chairperson

and each of the other committee members. The review committee shall send the written decision with a transmittal letter to the grantee and shall send a copy of both to the official responsible for the adverse determination. If the decision is adverse to the grantee's position, the transmittal letter must state the grantee's right to appeal to the Departmental Appeals Board under 45 CFR part 16.

Subpart E-Maximum Allowable Cost for Drugs

AUTHORITY: Sec. 215, Public Health Service Act, 58 Stat. 690 (42 U.S.C. 216).

SOURCE: 40 FR 34514, Aug. 15, 1975, unless otherwise noted.

$50.501 Applicability.

This subpart is applicable to programs or projects for health services which are supported in whole or in part by Federal financial assistance, whether by grant or contract, administered by the Public Health Service. It applies to Federal funds and to non-Federal funds which are required to be expended as a condition to receiving Federal funds under such programs or projects.

§ 50.502 Definitions.

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 p scribed in 45 CFR part 74, no sepant dispensing fee will be recognized.

(b) In determining whether a dispe ing fee is reasonable, the Secretar will take into account:

(1) Cost components such as o head, professional services, and profi

(2) Payment practices of third-par payment organizations, including othe Federal programs such as titles XV and XIX of the Social Security A and

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

(c) A certification by a prescribe pursuant to paragraph (a) of this se tion, that a brand of drug is medical necessary for a particular patient sha be in the prescriber's own handwritin in such form and manner as the Se retary may prescribe. An example of s acceptable certification is the notatio "brand necessary". A procedure checking a box on a form will not co stitute an acceptable certification.

Subpart F-Responsibility of App

cants for Promoting Objecti ity in Research for Which Ph Funding Is Sought

AUTHORITY: 42 U.S.C. 216, 289b-1, 2990-3.

SOURCE: 60 FR 35815, July 11, 1995; 60 1 39076, July 31, 1995, unless otherwise noted.

$50.601 Purpose.

This subpart promotes objectivity research by establishing standards ensure there is no reasonable expect tion that the design, conduct, or porting of research funded under PF grants or cooperative agreements w be biased by any conflicting financi interest of an Investigator.

§ 50.602 Applicability.

This subpart is applicable to each I stitution that applies for PHS gran or cooperative agreements for resear and, through the implementation this subpart by each Institution, each Investigator participating in suc research (see §50.604(a)); provided, the this subpart does not apply to SBI Program Phase I a tho

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As used in this subpart:

HHS means the United States Dertment of Health and Human Serves, and any components of the Deartment to which the authority inolved may be delegated.

Institution means any domestic or reign, public or private, entity or oranization (excluding a Federal agen(y).

Investigator means the principal inestigator and any other person who is esponsible for the design, conduct, or eporting of research funded by PHS, r proposed for such funding. For puroses of the requirements of this subart relating to financial interests, Investigator" includes the Investigaor's spouse and dependent children.

PHS means the Public Health Servce, an operating division of the U.S. Department of Health and Human Services, and any components of the PHS to which the authority involved nay be delegated.

PHS Awarding Component means the Organizational unit of the PHS that unds the research that is subject to chis subpart.

Public Health Service Act or PHS Act means the statute codified at 42 U.S.C. 201 et seq.

Research means a systematic investigation designed to develop or contribute to generalizable knowledge relating broadly to public health, including behavioral and social-sciences research. The term encompasses basic and applied research and product development. As used in this subpart, the term includes any such activity for which research funding is available from a PHS Awarding Component through a grant or cooperative agree

Significant Financial Interest means anything of monetary value, including but not limited to, salary or other payments for services (e.g., consulting fees or honoraria); equity interests (e.g., stocks, stock options or other ownership interests); and intellectual property rights (e.g., patents, copyrights and royalties from such rights). The term does not include:

(1) Salary, royalties, or other remuneration from the applicant institution;

(2) Any ownership interests in the institution, if the institution is an applicant under the SBIR Program;

(3) Income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;

(4) Income from service on advisory committees or review panels for public or nonprofit entities;

(5) An equity interest that when aggregated for the Investigator and the Investigator's spouse and dependent children, meets both of the following tests: Does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value, and does not represent more than a five percent ownership interest in any single entity;


(6) Salary, royalties or other payments that when aggregated for the Investigator and the Investigator's spouse and dependent children over the next twelve months, are not expected to exceed $10,000.

Small Business Innovation Research (SBIR) Program means the extramural research program for small business that is established by the Awarding Components of the Public Health Service and certain other Federal agencies under Pub. L. 97-219, the Small Business Innovation Development Act, as amended. For purposes of this subpart, the term SBIR Program includes the Small Business Technology Transfer (STTR) Program, which was established by Pub. L. 102-564.

§ 50.607 Other HHS regulations that apply.

Several other regulations and policies apply to this subpart.

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