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.