Orphan Drug Case Heats Up

A flutter of briefs is landing at the U.S. District Court for the District of Columbia as hospitals square off against the pharmaceutical industry’s efforts to limit sales of discounted orphan drugs to 340B providers.[ms-protect-content id=”2799″]

The American Hospital Association recently filed an amicus brief[1] in favor of a federal rule[2] allowing 340B hospitals to buy orphan drugs at discounted rates when prescribed for indications other than the rare disease for which they received their designation.  Another brief is expected this week from Safety Net Hospitals for Pharmaceutical Access, America’s Essential Hospitals and the National Rural Health Association.

In October, PhRMA filed a lawsuit[3] to block the Department of Health and Human Services regulation, arguing the rule undermines orphan-drug protections and runs counter to a provision in the Affordable Care Act that the industry believes blocks newly eligible 340B providers from receiving discounts on any drug that has an orphan drug designation regardless of how it is used.

The AHA disagreed: “Protections and incentives for pharmaceutical manufacturers under the orphan drug program apply only when the orphan drug is used for the orphan-designated rare disease or condition. The Final Rule supports the intent of Congress to improve access to 340B discounted drugs for rural hospitals and cancer hospitals, while protecting the financial incentives associated with orphan drug use.”

[4]

The association argues that orphan drugs are prescribed 90 percent of the time for indications not associated with their original use. Examples include Rituxan, Remicade and Neulasta. “The total use of an orphan product can be considerably more widespread than the “rare” designation would imply.”

AHA said that limiting orphan-drug discounts would make the medicines unaffordable, limit providers’ ability to serve patients and hurt hospitals financially.

A victory for the pharmaceutical industry “would provide a financial windfall to drug manufacturers for uses of the drug unrelated to the rare disease or condition, contrary to the language of the Orphan Drug Act and the Affordable Care Act.”

PhRMA has until January 10 to reply and the judge will rule on the case after January 17, 2014. All parties have urged the court to adjudicate the case as quickly as possible.

In the coming days, the Monitor will take a closer look at the case, including positions taken by PhRMA, the federal government and other participants.[/ms-protect-content]