HRSA’s 340B “Mega-Rule” Becomes Casualty of PhRMA Lawsuit Against Orphan Drug Rule

By Michelle L. Butler & Alan M. Kirschenbaum –

On November 13, 2014, the Health Resources and Services Administration (“HRSA”) withdrew the 340B program “mega-rule” it had submitted for review to the Office of Management and Budget.  In a previous blog post we reported on a federal court decision vacating HRSA’s regulation implementing the orphan drug exclusion under the 340B program.  The court had ruled that the statute did not grant HRSA authority to issue regulations on the orphan drug exemption.  Although that case did not directly involve the mega-rule, HRSA has apparently concluded, as we foresaw in our blog post, that the holding in that decision also would preclude the issuance of the mega-rule.  (See here for an update on HRSA’s orphan drug rule.  We note that a scheduling order was just entered with summary judgment briefing to conclude in March 2015.) 

In place of the mega-rule, it appears that HRSA intends to issue guidance, as it has traditionally done in the past.  On its website,  HRSA states: “In 2015, HRSA plans to issue a proposed guidance for notice and comment that will address key policy issues raised by various stakeholders committed to the integrity of the 340B program.  HRSA is also planning to issue proposed rules pertaining to civil monetary penalties for manufacturers, calculation of the 340B ceiling price, and administrative dispute resolution.”  It is safe to assume that the proposed guidances will, at a minimum, address the topics that were originally intended to be included in the mega-rule – i.e., the definition of an eligible patient; compliance requirements for contract pharmacy arrangements; hospital eligibility criteria; and eligibility of off-site facilities.