January 23, 2014—The federal government and drugmakers have made their final arguments in the industry’s lawsuit over the government regulation that lets certain rural and cancer hospitals access 340B discounts on orphan drugs when used for non-orphan indications. [ms-protect-content id=”2799″]
Federal District Judge Rudolph Contreras is expected to rule quickly, perhaps as soon as March. The two sides jointly asked him to expedite his decision.
Pharmaceutical Research and Manufacturers of America (PhRMA) has asked the court to decide whether the Health Resources and Services Administration (HRSA) had authority to issue the 340B orphan drug exclusion regulation, and if it did, whether it correctly interpreted the passage in the Affordable Care Act (ACA) that created the exclusion.
In its final filing, submitted Jan. 17, PhRMA argued that the ACA language “has only one reasonable meaning.”
By referring to “a drug” designated under the Orphan Drug Act, ACA’s 340B orphan drug exclusion “makes plain that any orphan-designated drug – whether used for the orphan indication or not – is excluded from 340B prices” for critical access hospitals, sole community hospitals, rural referral centers, and freestanding cancer hospitals that gained eligibility for 340B discounts under ACA, PhRMA said. “The text of the orphan drug exclusion is crystal clear and not capable of other interpretations….The court should decline [the government’s] request to blue pencil the statute.”
The Justice Department, meanwhile, asked the court in its final filing to either dismiss PhRMA’s suit or decide the case summarily in the government’s favor.
PhRMA “advocates for an unduly narrow reading both of the defendant agency’s authority to issue regulations in this area and of the language in the statute itself,” the department said. Congress never indicated that HRSA lacked authority to interpret the ACA language governing 340B pricing for orphan-designated drugs, and in view of this silence, HRSA’s regulation is entitled to deference, it continued. It said the regulation balances “the competing policies” of the Orphan Drug Act and the 340B program and avoids giving a windfall to the manufacturers of hugely profitable blockbuster drugs “that also happen to be designated for a rare disease or condition.” [/ms-protect-content]