AHA: Court Should Reject 340B Orphan Drug Challenge

The American Hospital Association has filed a friend-of-the-court brief supporting HHS in a suit seeking to increase the price of drugs with an "orphan" designation.

The suit, filed by the Pharmaceutical Research and Manufacturers of America, challenges an HHS final rule expanding the 340B drug discount program to rural and cancer hospitals as outlined in the Patient Protection and Affordable Care Act. The suit seeks to exclude all drugs with an "orphan" designation from the final rule, a drug that has been developed specifically to treat a rare condition and often carries a hefty price tag.

The brief filed by AHA states financial protections for orphan-drug manufacturers should only apply when the drug is being used to treat the orphan-designated disease or condition, and excluding all uses of these drugs from the 340B program would put a financial strain on rural and cancer hospitals.

"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 for rare conditions and diseases," according to the brief. "The Plaintiff's interpretation should be rejected for several critical reasons: it would deprive America's rural and cancer hospitals of the medically necessary drugs that in many cases are unaffordable; and it would jeopardize the financial sustainability of those hospitals. The Plaintiff’s interpretation at the same time would provide a financial windfall to drug manufacturers for uses of the drug unrelated to the rare disease or condition, contrary to the language and intent of both the Orphan Drug Act and the PPACA."

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