HHS vows to fight for ‘orphan drug’ rule

The Obama administration plans to fight for a rule that gives some medical facilities discounts on “orphan drugs” that are used to treat rare diseases.

A circuit court in Washington, D.C., last month struck down a federal regulation on the drugs, leaving the Department of Health and Human Services (HHS) with a choice of either appealing or starting fresh with a new rule.

“HHS is currently evaluating its options as to how to respond to the court’s decision, including whether to appeal and/or whether to propound an interpretive rule or other type of interpretive guidance that would set forth HHS’s interpretation,” the department said.

Orphan drugs are medicines designed for patients who have a disease that affects fewer than 200,000 people, but the drugs are often used “off-label” for other purposes.

The 340B program was created to help hospitals and clinics that serve low-income people receive discounts on drugs. A provision in ObamaCare expanded the number of healthcare facilities that qualify for the discounts.

The HHS rule issued earlier this year would have only allowed reimbursements to 340B hospitals and clinics when an orphan drug is used to treat a rare disease. 

But the district court judge said the administration did not have the authority to make the rule and issued a permanent injunction halting it after the Pharmaceutical Research and Manufacturers of America sued the government.

Tom Barker, a healthcare attorney with Foley Hoag, said the department is at “real risk” of losing on appeal.

He said the best option for the government would be to issue an interpretive rule that would outline the department’s interpretation of the 340B program, which doesn’t necessarily have to be followed by hospitals and drugmakers.

Ultimately, Barker says Congress would either have to pass legislation explicitly stating the orphan drug rule or pass legislation that gives the HHS secretary the power to interpret the 340B program.