The U.S. Department of Health & Human Services (HHS) Health Resources and Services Administration (HRSA) published today a statement responding to the recent court decision vacating the 340B Drug Discount Program Orphan Drug Rule.  As we previously reported, the D.C. District Court permanently enjoined HRSA from implementing its July 23, 2013 final rule on “exclusion of Orphan Drugs for Certain Covered Entities under 340B Program” (the “Orphan Drug Rule”).  The Orphan Drug Rule permitted “new” covered entities established under the Affordable Care Act (free-standing cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals) to access 340B pricing on orphan drugs, so long as the drugs were not to be used for an orphan indication. On its website today, HRSA stated that although the court “vacated the orphan drug regulation on the grounds that HHS lacks the statutory authority to engage in such rulemaking,” the court “did not invalidate HRSA’s interpretation of the statute”.

HRSA stated that it “continues to stand by the interpretation described in its published final rule, which allows the 340B covered entities affected by the orphan drug exclusion to purchase orphan drugs at 340B prices when orphan drugs are used for any indication other than treating the rare disease or condition for which the drug received an orphan designation.”  Accordingly, manufacturers of orphan drugs as well as covered entities should consider reviewing their current policies regarding purchasing and discounting orphan drugs in the 340B program.  It is not clear at this time whether HRSA’s statement will be further challenged.

Posted by Kathleen Peterson

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