PhRMA Sues The Feds Over 340B Discounts On Orphan Drugs

Once again, the 340B Drug Pricing Program is at the center of a controversy. The latest flap involves discounts that the US Health Resources and Services Administration established for a select group of hospitals in order for them to obtain orphan drugs, which are medications that were approved by the FDA to treat rare diseases. An HRSA rule governing orphan drug discounts went into effect this week. In response, the PhRMA trade group has filed a lawsuit against HRSA and accused the agency of erroneously interpreting a provision of the Affordable Care Act that defines the extent of the discounts to be made available for orphan drugs. Specifically, PhRMA argues HRSA inappropriately carved out an exception that places its members – the drugmakers that must offer discounts – at a disadvantage. How so? The HRSA rule allows certain hospitals, including critical access hospitals, free-standing cancer hospitals and rural referral centers, to purchase orphan drugs at the 340B discounted price so long as the medications are not used for indications approved by the FDA (here is the Federal Register notice). PhRMA counters that the agency overstepped its bounds because the Affordable Care Act excluded discounts on orphan drugs altogether. As a result, PhRMA contends that any discount would, essentially, dilute the financial incentives that drugmakers receive for developing orphan drugs, which are used to treat a condition that affects 200,000 or so people. As of last April, about 3,...
Source: Pharmalot - Category: Pharma Commentators Authors: Source Type: blogs