The Health Resources and Services Administration (HRSA) announced that it plans to stand by its interpretation of the 340B orphan drug rule. The notice published on the HRSA website says that the U.S. District Court for the District of Columbia did not invalidate HRSA’s interpretation of the 340B orphan drug rule. Pharmaceutical Research and Manufacturers of America (PhRMA) has appealed to challenge this interpretation. In the meantime, HRSA noted that the agency will continue to publish updated orphan drug designation lists to assist manufacturers in complying with the policy.

The Affordable Care Act (ACA) designated critical access hospitals, freestanding cancer hospitals, rural referral centers, and sole community hospitals eligible to purchase drugs at discounted rates, but excluded orphan drugs, which treat rare diseases or conditions. The May 2013 final rule from the U.S. Department of Health and Human Services (HHS) clarified that these hospitals may purchase orphan drugs at discounted rates, if these drugs are used for purposes other than the designated orphan drug purpose. The District Court vacated the HHS final rule in May, on the grounds that HRSA, as part of HHS, did not have authority to issue such a regulation.

Please contact Xiaoyi Huang, JD, director of policy, at xhuang@essentialhospitals.org or 202.585.0127 with questions.