September 16, 2014—The fallout from last May’s 340B orphan drug exclusion court decision casts doubt over whether certain 340B program requirements are binding, a prominent attorney for manufacturers said at an industry conference in Chicago today.[ms-protect-content id=”2799″] As a result, she said, drugmakers should have serious conversations about whether they should keep abiding by 340B guidelines and policies that might not be in their best interest.
“Don’t make the default decision and don’t just continue with the status quo because that’s the way it’s always been done,” said Alice Valder Curran of the Hogan Lovells law firm during a keynote speech at the Medicaid Drug Rebate Program Summit. “These decisions have real policy and real financial impacts to your company. So it’s worth going back and asking, ‘What do we have to do?'”
Curran cautioned that, in the current state of regulatory uncertainty, health care providers also might begin to question whether or to what degree they must keep following 340B guidelines and policies, for example the 1996 guidance defining which patients are eligible to receive drugs bought with the 340B discount.
When asked what policy approach manufacturers should favor in order to bring certainty to 340B, Curran replied: “I think manufacturers have to support rulemaking authority” for the Health Resources and Services Administration.
“I’d much rather have rules and I’d much rather have notice and comment,” she explained. Much of the guidance issued by HRSA over the years has gone through the notice-and-comment process, including guidance on patient definition and contract pharmacies. Nevertheless, this guidance has not been issued in formal regulation.
Curran said she is not sure if HRSA’s so-called 340B mega-rule will be published, due to Pharmaceutical Research and Manufacturers of America’s successful lawsuit against HRSA’s July 2013 orphan drug exclusion regulation.
In that decision, the court held that Congress did not authorize HRSA to issue a “legislative” regulation to implement the Affordable Care Act’s 340B orphan drug exclusion. HRSA’s 340B mega-reg, slated for release in July, has been on hold, it is thought, because is not clear whether HRSA has authority to issue legislative regulations on the subjects it was expected to address: patient definition, contract pharmacy, hospital eligibility, and offsite facility requirements.
“In some ways, PhRMA is winning the battle but losing the war because there were going to be great things, I think, in that rule for manufacturers in terms of patient definition and covered entity eligibility requirements,” Curran said. “Manufacturers got a big win” on the orphan drug exclusion, she said, but HRSA’s mega-rule “was rumored to be pretty fair to manufacturers on the issues manufacturers think are important for controlling the program.”[/ms-protect-content]