The battle continues between drugmakers and healthcare providers over the breadth of the federal 340B drug discount program, which assists providers serving indigent and uninsured patients.
The Pharmaceutical Research and Manufacturers of America filed a lawsuit Sept. 27 to block implementation of a federal rule that allows healthcare providers in the 340B program to buy orphan drugs at reduced prices if the drugs are used to treat non-orphan conditions or diseases.
Orphan drugs are designated to treat diseases or conditions that affect fewer than 200,000 people. But these drugs often have indications for other non-orphan conditions or diseases. They can be some of the most expensive medications on the market, sometimes costing thousands of dollars a month, even though many hundreds of thousands or millions of patients take the drugs.
In the suit, filed in the U.S. District Court for the District of Columbia, PhRMA alleges that the regulation is based on an erroneous reading of the statutory text and is outside the scope of HHS' rulemaking authority.
The Health Resources and Services Administration, which is part of HHS, released the final rule in July. It went into effect Tuesday.
The drug trade group this year said that final rule on the orphan-drug exclusion would “undermine” Congress' intent to preserve orphan-drug development incentives. In the lawsuit, PhRMA said its member companies will suffer financial harms if they are required to offer 340B pricing “beyond the clear boundaries of the 340B statute.”
“The interpretation is inconsistent with the clear statutory direction,” Mit Spears, PhRMA's executive vice president and general counsel, said in an e-mailed statement.
The Safety Net Hospitals for Pharmaceutical Access, a trade group representing hospitals that participate in the 340B program, said in a statement that “we hope the court will deny PhRMA's request for an injunction and uphold the regulation in any subsequent litigation.”
The 340B program requires drug companies to provide discounts up to 50% on covered outpatient drugs to hospitals and other participating providers that serve indigent or uninsured patient populations.
The program was created decades ago. But Congress in 2010 expanded eligibility to critical-access hospitals, sole community hospitals, rural referral centers and free-standing cancer hospitals as part of the Patient Protection and Affordable Care Act.
A provision, called the orphan-drug exclusion, was added during reconciliation. It prevents the newly eligible providers from accessing 340B pricing for orphan drugs. The new rule was expected to clarify that provision and states that providers can buy orphan drugs at 340B prices as long as the drug is used to treat high volumes of patients with non-orphan conditions.
Follow Jaimy Lee on Twitter: @MHjlee
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.
