February 5, 2015—The Health Resources and Services Administration today identified 13 drug companies that are not complying with its 340B orphan drug exclusion interpretive rule. [ms-protect-content id=”2799″]
HRSA posted the list on the Office of Pharmacy Affairs website. The companies are:
- AuroMedics Pharma LLC
- Baxter International Inc.
- Bayer AG
- Eisai Co., Ltd.
- Eli Lilly and Company
- Genentech Inc.
- GlaxoSmithKline plc
- Ipsen
- Novartis International AG
- Pfizer, Inc.
- Roche
- Salix Pharmaceuticals, Ltd.
- Virtus Pharmaceuticals, LLC
HRSA’s July 2014 interpretative rule pertains to language in the Affordable Care Act that made certain rural and cancer hospitals eligible for the 340B program but also excluded them from access to 340B pricing for drugs designated under the Orphan Drug Act for a rare disease or condition. In a 2013 final regulation, HRSA said that the newly eligible hospitals could buy orphan-designated drugs at 340B-discounted prices when the drugs were being used for common conditions.
PhRMA sued HRSA to challenge the legality of the regulation and won, with a federal district judge ruling in May 2014 that HRSA lacked authority under the 340B statute to promulgate a “legislative” regulation implementing the exclusion. The court however, left open whether HRSA’s reading of what the 340B statute requires could survive as a lesser “interpretive” rule, and whether HRSA’s reading of the law had merit. HRSA published such a rule last summer, saying it interpreted the 340B statute virtually the same as it did in the defunct legislative rule. PhRMA sued HRSA again, saying the interpretive rule was not a valid reading of the orphan drug exclusion.
Attorneys for the Department of Health and Human Services asked a federal district judge last month to dismiss the drug industry’s lawsuit. Pharmaceutical Research and Manufacturers of America’s response is due Feb. 25.
In the public notice it posted on the OPA website, HRSA said that, after it issued its interpretative rule, it received “multiple reports that certain manufacturers [were] not complying with statutory requirements.”
“HRSA communicated with manufacturers regarding their compliance with the statute,” the notice continues. “Based on information gathered through that inquiry, HRSA is making available a list of manufacturers that are not offering 340B pricing for their designated orphan drug products (when used for their non-orphan indications) to newly eligible covered entities.”
“As 340B discounts are not being provided on these drugs, there is no risk of 340B duplicate discounts,” HRSA said. “Therefore, states may utilize this information to obtain Medicaid rebates for such drugs.”
OPA Director Cmdr. Krista Pedley was asked about the notice today during the 340B Coalition winter meeting in San Francisco. She was taking questions from conference participants via an audio feed from her office in suburban Washington.
Cmdr. Pedley said HRSA released the companies’ names “to inform the states of this information so they can get rebates for these drugs.” She declined to answer a question about what enforcement action HRSA might take against the companies, citing the ongoing litigation.
“We believe it is fully appropriate for HRSA to post the list of drug companies not complying with the orphan drug rule,” said Safety Net Hospitals for Pharmaceutical Access, which represents hospitals in the drug discount program. “States can now move forward to get rebates under the Medicaid program.” [/ms-protect-content]