Court Says PhRMA Must File New Suit Against 340B Interpretive Rule

The Washington D.C. District Court ruled that the Pharmaceutical Research and Manufacturers of America (PhRMA) needs to file a separate complaint in order to challenge a new interpretive rule covering orphan drugs in the 340B orphan drug rule.

The 340B orphan drug program was established by the Department of Health and Human Services (HHS) so hospitals could be granted access to orphan drugs at a discounted price. These include critical access hospitals, sole community hospitals, rural referral centers, and cancer hospitals. As long as these hospitals use orphan drugs to treat a non-orphan designated condition, the 340B rule says they can access the drugs at discounted prices.

This June, the U.S. District Court for the District of Columbia ruled to vacate the Orphan Drug Rule, saying that the HHS did not possess the authority to implement the program. The HHS’ Health Resources and Services Administration (HRSA) responded by implementing the same policy as an interpretive rule rather than an official regulation. The PhRMA challenged the new document and argued that it is identical to the orphan drug rule just vacated. According to the PhRMA, the new interpretive rule document “adopts the same interpretation of ‘covered outpatient drugs’ and imposes the same compliance obligations as the vacated Final Rule.”

A federal judge declined PhRMA’s request on the grounds that its original complaint only challenged the final rule implemented by HRSA and did not cover the new interpretive rule, which was determined to be beyond the scope of the current lawsuit.

Based on the court’s decision, HRSA may legally implement its interpretive rule for the time being. In fact, the HRSA’s Office of Pharmacy Affairs (OPA) recently announced its latest monthly update for the program regarding self disclosures. The new integrity update stated that a covered entity or qualified hospital taking part in the 340B program needs to contact OPA as soon as possible after a material breach or violation of any 340B Program requirement. However, the release did not define what the OPA considers to be a “material breach.”