PhRMA sues feds, again, over controversial hospital orphan drug discount rule
- The Pharmaceutical Research and Manufacturers of America (PhRMA) trade organization has filed another lawsuit against the U.S. Department of Health and Human Services (HHS) over a controversial orphan drug rule that is part of the 340B drug discount program for safety net hospitals.
- As the Wall Street Journal's Ed Silverman explains, the 340B program requires pharmaceutical companies to offer steep discounts (up to 50%) on all outpatient drugs to safety net providers that serve a disproportionate share of uninsured and poor Americans.
- The industry is suing over a specific rule reissued by the Health Resources and Services Administration (HRSA) two months ago that allows hospitals to enjoy these discounts on orphan drugs, but only if those drugs are used for purposes other than treating the rare disorders that they were originally intended to address.
This is PhRMA's second offensive against the HRSA orphan drug rule, which was originally issued in 2013 but struck down by a federal judge who sided with drug makers at the time (HRSA has since reissued the rule). Pharmaceutical companies say the rule, which is ostensibly meant to encourage orphan drug development while giving hospitals access to important drugs for the medically needy, amounts to an unsustainable financial hit for companies that invest in pricey orphan drugs.
Trade groups representing safety net providers had a different take on the lawsuit. “Once again, big pharma is trying to increase its prices at the expense of rural and cancer hospitals and their patients,” said Ted Slafsky, head of the Safety Net Hospitals for Pharmaceutical Access. “These providers depend on 340B savings to serve needy patients and, in many cases, to keep their doors open.”
- Wall Street Journal Pharma Sues Again Over Orphan Drug Discounts to Hospitals