Judge Rules Against HHS in 340B Drug Discount Suit

U.S. District Judge Rudolph Contreras has ruled against HHS in a suit challenging a final rule from the agency expanding the 340B drug discount program to rural and cancer hospitals as outlined in the Patient Protection and Affordable Care Act.

The Pharmaceutical Research and Manufacturers of America filed the suit, seeking to exclude all drugs with an "orphan" designation — a drug that has been developed specifically to treat a rare condition and often carries a hefty price tag — from the final rule. Judge Contreras ruled in favor of PhRMA, finding that HHS does not have the authority to implement regulations implementing PPACA 340B provisions.

Hospital associations have supported HHS in the suit. Safety Net Hospitals for Pharmaceutical Access — a nonprofit organization consisting of more than 1,000 nonprofit hospitals and health systems — issued a statement saying the group was "deeply disappointed" by the ruling.

"The judge's decision means there is no longer a regulation in place that authorizes rural and cancer hospitals to access 340B discounts on orphan drugs when the drugs are used for non-orphan indications," SNHPA stated in a news release. "SNHPA anticipates that drug manufacturers will stop offering 340B pricing on orphan drugs to affected hospitals, which will impose a very heavy financial burden on these institutions and their patients."

Last year, the American Hospital Association filed a friend-of-the-court brief stating 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.

More Articles on the 340B Drug Discount Program:
Alliance for Integrity Analysis Questions 340B Hospitals' Charity Care
PhRMA Files Lawsuit to Stop 340B Drug Discount Regulation
AHA: Court Should Reject 340B Orphan Drug Challenge 

 

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