Organizations representing safety-net healthcare providers filed a friend-of-the-court brief Dec. 20 supporting a Department Health and Human Services (HHS) rule that allows many of their members to receive discounted pricing on “orphan” drugs when not used to treat rare diseases. [ms-protect-content id=”2799″]
Safety Net Hospitals for Pharmaceutical Access (SNHPA), America’s Essential Hospitals and the National Rural Health Association asked the U.S. District Court for the District of Columbia to block the pharmaceutical industry’s efforts to end the availability of orphan drugs under the 340B drug discount program for rural and free-standing cancer hospitals. PhRMA sued for an injunction against the HHS rule in Oct.
The providers argue an injunction is “not warranted because … hospitals and patients … would be harmed by losing important discounts. Hospital drug costs will increase, leading to reduced services and increased drug costs for patients, and patients will find it more difficult to access certain types of care.”
PhRMA says that HHS wrongly interpreted the law on orphan drugs and that none should be available on a discounted basis through 340B, regardless of use.
The orphan-drug designation is given to a special class of medicines that have the potential to treat rare diseases that affect a limited number of people. The law gives pharmaceutical companies tax incentives and competitive protections to spur creation of these drugs for very small markets. However, many orphan drugs are blockbusters due to their effectiveness in treating conditions other than the ones for which they were designated. Examples include Prozac for depression (orphan designated to treat autism and body dysmorphic disorder in children and adolescents) and Remicade for rheumatoid arthritis (orphan designated to treat Crohn’s disease and ulcerative colitis, among others).
“We believe that PhRMA is wrong to say that the 340B law’s orphan drug limit applies to every use of the drug, even if the use has nothing to do with an orphan disease,” said Maureen Testoni, general counsel for SNHPA. “The law is clear on this point.”
The case is the latest skirmish between safety-net providers and the pharmaceutical industry over drug pricing and the 340B program.
On Dec. 13, the government filed a memorandum in support of its motion for the court to dismiss the case. “HHS’s regulation is valid because the agency reasonably interpreted the statute to make drugs that have received an orphan-drug designation subject to the same general rules and requirements under the 340B Program as all other covered outpatient drugs, when the orphan-designated drugs are being used for common diseases or conditions.”
PhRMA also filed a memo seeking to forestall the government’s argument. “The plain text of the Orphan Drug Exclusion is self-executing and requires no interpretation, and, accordingly, Congress did not authorize rulemaking to implement this unambiguous provision.”
The American Hospital Association filed a brief with the court the same week in favor of the HHS rule. Further filings from PhRMA are expected early in the new year. [/ms-protect-content]