August 22, 2014—Most drugmakers reportedly are not extending 340B pricing on orphan drugs to rural and freestanding cancer hospitals despite the Health Resources and Services Administration’s position that they are required by law to do so. [ms-protect-content id=”2799″]
Apexus, the 340B Prime Vendor, said in latest Pharmacy Flash email newsletter that “at least five manufacturers (Amgen, American Regent, Astellas, Aptella and Fresenius) have communicated that they will be providing 340B prices on orphan drugs when used for the non-orphan indication.”
“The majority of manufacturers have declined to sell drugs at 340B prices to the affected entities,” Apexus said. “A much larger list of manufacturers have either provided documentation to wholesalers of their decision not to honor such sales or are currently denying all chargebacks on 340B sales of their orphan drugs to these entities. Many manufacturers have yet to make a final decision and are in the process of consulting with their internal and external legal councils on the matter.”
HRSA published an interpretive rule on July 21 that interprets the Affordable Care Act’s 340B orphan drug exclusion the same as HRSA’s year-old final rule that a federal district judge vacated in May. The judge ruled that HRSA lacked authority to issue a substantive or “legislative” rule to carry out the exclusion, and that the final rule appeared to him to be legislative. HRSA takes the position that, although the judge vacated the rule, he did not invalidate HRSA’s underlying interpretation of the orphan drug exclusion.
HRSA said its interpretive rule “clarifies that HHS interprets [the 340B statute’s orphan drug exclusion] as excluding drugs with an orphan designation only when those drugs are transferred, prescribed, sold, or otherwise used for the rare condition or disease for which the drug was designated.” When the same drugs are used for different conditions or diseases, they are eligible for 340B pricing, HRSA said.
Pharmaceutical Research and Manufacturers of America, which sued HRSA over the original regulation and won, has asked a federal district judge to vacate the interpretive rule, arguing it is just the same rule in a different guise.
In its email newsletter, Apexus said drug wholesalers “are aware of HRSA’s interpretation and desire to support their hospital customers but at the same time must support the independent decisions of each manufacturer.”
“The wholesalers are challenged to do this because they are at currently at risk of chargeback denials, and financial loses, on 340B sales as each manufacturer works through the process of making the decision on whether to offer 340B prices on their orphan drugs to these entities separately,” Apexus said. “Some wholesalers have taken a more conservative financial position in not extending 340B pricing to the entities unless notified by the manufacturer that they agree to honor such sales. The market is expected to be inconsistent as manufacturers and wholesalers work through the issues.” [/ms-protect-content]