Judge sides with PhRMA, rules orphan drugs not covered by 340B discount program
- The Affordable Care Act's 340B drug discount program requires drug companies that participate in Medicaid to discount outpatient medications for hospitals and clinics, with the goal of expanding access to low-income individuals.
- Although the Affordable Care Act (ACA) expanded the 340B discount program to help low-income patients, orphan drugs were not included.
- The Pharmaceutical Reearchers and Manufacturers of America (PhRMA) has sued the Obama administration twice over the administration's attempts to include orphan drugs as part of the the 340B plan. On Thursday, U.S. District Judge Rudolph Contreras sided with PhRMA and ruled against the HHS' interpretation expanding the discount program.
Chalk this up as a victory for PhRMA, which asserts that attempting to discount orphan drugs, which are for rare diseases and tend to be expensive, is a disincentive for pharma companies pursuing R&D.
On the other side, hospitals say that they will bear the burden of high-cost orphan drugs and have to decrease the amount of uncompensated care they give to low-income patients. The pushback from pharma is that many of these hospitals use the 340B money on other things besides charity care.
Clearly, the provision excluding orphan drugs from 340B inclusion won't be changing any time soon.
"PhRMA supports the original intent of the 340B program and remains committed to working with the administration and Congress to reform the 340B program to ensure it reaches the vulnerable or uninsured patients it was intended to help," said Mit Spears, PhRMA executive vice president and general counsel, in a statement. "To achieve this important objective, it is critical the program operates in a manner consistent with the clear and unambiguous direction of Congress."
- Modern Healthcare Judge sides with drugmakers and narrows 340B drug discounts