Judge narrows 340B discounts: 5 things to know

A federal court has vacated HHS' Health Resources and Services Administration's interpretive rule that allowed rural and cancer hospitals to access 340B Drug Pricing Program discounts when purchasing orphan drugs for a non-orphan use.

Here are five things to know about the 340B program and the court's recent ruling.

1. The 340B program — which has stirred up considerable controversy in recent years — allows certain safety-net healthcare organizations to purchase outpatient drugs at discounted prices.

2. In July 2014, HRSA released a rule that set forth its interpretation of section 340B(e) of the Public Health Services Act. The interpretive rule confirmed that the agency would allow rural and cancer hospitals to access discounts for orphan drugs when the drugs were not used for the conditions that resulted in their orphan designation.

3. Lobbying group Pharmaceutical Research and Manufacturers of America challenged HRSA's interpretive rule last October. PhrMA's suit — filed in the U.S. District Court for the District of Columbia — asked the court to vacate the interpretive rule.

4. Last week, the court sided with PhrMA, ruling HHS' guidance is contrary to federal law. Under the court's ruling, rural and cancer hospitals will be unable to purchase orphan-designated drugs at 340B pricing regardless of the reason a patient is taking the drug.

5. Hospitals were disappointed with the court's ruling. Tom Nickels, AHA executive vice president, said that denying access to these 340B discounts will "reduce access to critical services and treatments for some of the most vulnerable patients in society."

More articles on the 340B program:

HRSA releases 340B Program 'mega guidance': 18 key points
7 things to know about the 340B Drug Pricing Program
Spending double at hospitals with 340B program

 

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