HHS issues interpretative rule on 340B and Orphan drugs

As expected, HHS's Health Resources and Services Administration (HRSA) issued an interpretative rule on Monday that states that Orphan drugs can be discounted under Medicare's 340B program when used for non-Orphan indications. The 340B program requires manufacturers to deeply discount outpatient drugs to hospitals and clinics bearing the brunt of healthcare for low income and other special populations. In 2010, Congress amended the program to exclude Orphan drugs from discounting, but the law was unclear on whether the exclusion applied when the drugs were used for non-Orphan indications.

A July 2013 final rule from HHS said Orphan drugs were to be discounted when used in non-Orphan indications. The Pharmaceutical Research and Manufacturers of America subsequently challenged the final rule, and in May, the U.S. District Court for the District of Columbia vacated the final rule because HHS lacked the authority to issue it. Despite the ruling, last month, HRSA said it would continue to enforce the 2013 final rule and its interpretation of the statue for Orphan drugs, noting the court did not rule on the agency's interpretation of the statute (see BioCentury Extra, June 18). ...