July 17, 2013—The White House Office of Management and Budget (OMB) has finished its review of the long-awaited final regulation to implement health care reform’s partial limit on 340B discounts for orphan drugs, presumably clearing the rule for publication in the Federal Register.[ms-protect-content id=”2799″]
OMB completed the review on July 12. It said the regulation was approved “with change,” which in bureaucratic parlance means anything from a simple change in punctuation to substantive revisions. A notation on the OMB website indicates the rule may be issued this month.
On July 15 during the 340B Coalition annual conference in Washington, HRSA Office of Pharmacy Affairs (OPA) Deputy Director Michelle Herzog was asked during a question and answer session if OPA had anything to report about the regulation’s status.
“Yes, she replied. “Stay tuned.”
HRSA submitted the final orphan drug rule for review on Jan. 31. It would be the first formal regulation in the 340B program’s history.
HRSA is planning to issue a comprehensive regulation covering all aspects of the 340B program. Early this month in its spring 2013 semiannual regulatory agenda, the Department of Health and Human Services (HHS) said the timetable for HRSA to issue a notice of proposed rulemaking is June 2014.
According to the HHS document, the rule’s formal title is “340B Drug Pricing Program Regulations” and its purpose is to “establish comprehensive 340B Drug Pricing Program requirements for participating covered entities and manufacturers.” Its Regulatory Identification Number (or RIN, the number assigned to each upcoming regulation for each federal agency), is RIN 0906-AB04.
The Affordable Care Act (ACA) added free-standing cancer hospitals, critical access hospitals, sole community hospitals, and rural referral centers to the list of health care providers eligible for 340B drug discounts. A related budget reconciliation bill passed a few days after ACA became law excluded orphan drugs “for a rare disease of condition” from the definition of 340B covered outpatient drug for the newly-eligible hospitals as well as for children’s hospitals, which gained eligibility for 340B discounts under a 2005 law. Congress lifted the restriction for children’s hospitals in December 2010.
HRSA issued a notice of proposed rulemaking on May 20, 2011 stating that rural and freestanding cancer hospitals should be allowed to buy orphan drugs at 340B-discounted prices when they use the medicines to treat non-orphan diseases or conditions.
340B health care providers welcomed HRSA’s interpretation of the exclusion but attorneys for drug manufacturers criticized it, with some saying it would “gut” the restriction on 340B pricing.[/ms-protect-content]