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Orphan Drugs Excluded From 340B Program

Court states manufacturers do not have to sell them to certain hospitals at a discount

A U.S. District Court ruling has excluded medications with an orphan drug designation from the 340B program for rural and cancer centers.

Pharmaceutical Research and Manufacturers of America (PhRMA) had sued over a U.S. Department of Health and Human Services interpretation that extended the drug discounts to treat conditions other than rare diseases. The win for PhRMA angered many hospitals and organizations, especially the American Hospital Association (AHA).

As reported by Healthcare Finance, Tomy Nickels, AHA Executive Vice President, stated, "Denying these hospitals the ability to utilize 340B discounts for these drugs will reduce access to critical services and treatments for some of the most vulnerable patients in society."

Judge Rudolph Contreras, who made the ruling, said the law shows Congress intended to exclude all drugs carrying an orphan designation from 340B program eligibility for newly added entities.

Hospitals fear the ruling could mean higher prices and limited access to some drugs, particularly for rural providers. Not only is the HHS interpretation of the law contrary to what is written, but it is "arbitrary, capricious, and an abuse of discretion," Contresas wrote.

PhRMA's win could prompt a minor exodus of health care providers from the program, invite other legal challenges, and ramp up pressure on Congress to intervene, according to Law360.

Source: Healthcare Finance, October 16, 2015.

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