340B Orphan Drug Exclusion Saga Continues; Court Says PhRMA Must Start Over

By Alan M. Kirschenbaum –

We have reported previously (here and here) on PhRMA’s lawsuit challenging a HRSA regulation implementing the orphan drug exclusion that applies to certain types of covered entities under the 340B Drug Discount Program. To recap briefly, the rule had provided that the orphan drug exclusion is applicable only to orphan drugs when used for the rare condition or disease for which that orphan drug was designated, so that covered entities are entitled to 340B discounts when a drug designated as an orphan drug for one indication is used for a different, non-orphan indication. In May, the D.C. District Court vacated the rule on the ground that HRSA did not have statutory authority to promulgate a legislative rule on this subject. Last month, HRSA responded by issuing a substantially identical rule, but characterizing it as an interpretive rule. PhRMA then asked the Court to either order additional briefing on whether the now-interpretive rule is valid, or to vacate the rule.

Today, the Court denied PhRMA’s request, ruling that the new interpretive rule is not the subject of PhRMA’s lawsuit. Accordingly, PhRMA “is free to challenge that interpretive rule, but such a challenge is beyond the scope of the instant action.”

To be continued . . . .