The Health Resources and Services Administration (HRSA) announced that it will issue a new interpretive rule addressing the 340B orphan drug exclusion. The new rule will allow the Affordable Care Act (ACA)-designated 340B entities to receive discounts when purchasing orphan drugs for non-orphan uses.

The ACA designated critical access hospitals, freestanding cancer hospitals, rural referral centers, and sole community hospitals eligible to purchase drugs at a discounted rate under the 340B Drug Pricing Program. The ACA excluded orphan drugs, which treat rare diseases or conditions, from the set of specified discounted drugs. The May 2013 final rule from the U.S. Department of Health and Human Services (HHS), which oversees HRSA, 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. This rule was vacated by the U.S. District Court for the District of Columbia on the grounds that HHS does not have the authority to issue this substantive rule. Following this decision, HRSA decided that there is still a need for the agency to clarify its interpretation of how the orphan drug exclusion provision should be interpreted.

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