HHS reis­sues dis­puted 340B pol­icy on or­phan-drug dis­counts

Modern Healthcare - - NEWS - By Jaimy Lee

HHS has is­sued an in­ter­pre­tive rule re­quir­ing drug com­pa­nies to pro­vide dis­counts on or­phan drugs sold through the fed­eral 340B drug dis­count pro­gram, just months af­ter a fed­eral judge struck down its pre­vi­ous ver­sion of the rule.

The new rule, pub­lished last week, re­quires drug com­pa­nies to pro­vide dis­counts be­tween 20% and 50% on or­phan drugs used for non-or­phan con­di­tions or dis­eases to free-stand­ing can­cer hos­pi­tals, crit­i­cal-ac­cess hos­pi­tals, ru­ral re­fer­ral cen­ters and sole com­mu­nity hos­pi­tals that par­tic­i­pate in the 340B pro­gram.

The Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica, the drug in­dus­try’s lob­by­ing group, last year sued HHS, and a fed­eral judge ruled against HHS in May. The ad­min­is­tra- tion, how­ever, took the po­si­tion that the out­come al­lowed it to reis­sue the same pol­icy in a dif­fer­ent form.

A PhRMA spokes­woman said her group still thinks the Health Re­search and Ser­vices Ad­min­is­tra­tion, which over­sees the 340B pro­gram, doesn’t have the au­thor­ity to is­sue rule­mak­ing around the pro­vi­sion. “The end re­sult of this govern­ment power play is that the same rule with the same le­gal ef­fects would be dressed in new cloth­ing,” PhRMA lawyers said in court doc­u­ments filed July 18. PhRMA has asked the court whether the rule can sur­vive in its new ver­sion or to va­cate the rule be­cause HHS doesn’t have the rule­mak­ing au­thor­ity.

The re­vised rule is seen as a vic­tory for par­tic­i­pat­ing safety net hos­pi­tals. Or­phan drugs are some of the most ex­pen­sive drugs on the mar­ket and dis­counts on these ther­a­pies may be a con­tribut­ing rea­son why some hos­pi­tals en­roll in the 340B pro­gram. HHS’ po­si­tion on this is­sue “has been cor­rect all along,” said a spokesman for Safety Net Hos­pi­tals for Phar­ma­ceu­ti­cal Ac­cess, which rep­re­sents hos­pi­tals in the 340B pro­gram. “Or­phan drug dis­counts are es­sen­tial to help­ing these health­care providers treat un­der­served pa­tients.”

The pur­pose of the 340B pro­gram is to of­fer dis­counts on cov­ered out­pa­tient drugs to providers that serve a large num­ber of unin­sured or in­di­gent pa­tients. The providers can then keep the sav­ings and rev­enue from the dis­counts.

“Or­phan drug dis­counts are es­sen­tial to help­ing these health­care providers treat un­der­served pa­tients.”

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