- HHS will allow certain hospitals to receive 340B discounts on orphan drugs when they are used for nonorphan conditions — despite a district court ruling in May that said the agency lacked the authority to do so. Orphan drugs are medicines developed specifically to treat a rare medical condition.
- On the HHS website, the agency contends that the ruling "vacated the orphan drug regulation on the grounds that HHS lacks the statutory authority to engage in such rulemaking" but did not invalidate the agency's interpretation of the statute.
- In a court ruling last week, HHS announced its plans to appeal the court decision or release guidance that would replace the rule, but continue to continue to require drugmakers to provide the discounts.
The 340B program requires drug manufacturers to provide substantial discounts on outpatient drugs to participating providers. Some hospitals, including critical access hospitals, free-standing cancer hospitals, sole community hospitals and rural referral centers, are subject to an "orphan drug" exclusion: The HHS rule, issued in 2013, says that providers must pay higher prices for these drugs when treating patients with rare conditions, but not when using them to treat more commons conditions.
The kinds of rare conditions that call for orphan drug use affect fewer than 200,000 people in the U.S.