HRSA Stands by Interpretation of Orphan Drug

    On May 23, 2014, the U.S. District Court for the District of Columbia issued a ruling in Pharmaceutical Research and Manufacturers of America v. US Department of Health and Human Services (HHS) (Civil Action No. 13-1501) that vacated the orphan drug regulation on the grounds that HHS lacks the statutory authority to engage in such rulemaking. However, the Court did not invalidate HRSA’s interpretation of the statute.


    HHS/HRSA reaffirmed via Commander Krista Pedley comments at the 340B Coalition DC conference and by issuing an Interpretive Rule on July 21, 2014 which was published in the Federal Register that it continues to stand by the interpretation described in its published final rule July 23, 2013, which allows the 340B covered entities affected by the orphan drug exclusion to purchase orphan drugs at 340B prices when orphan drugs are used for any indication other than treating the rare disease or condition for which the drug received an orphan designation. HRSA is continuing to post updated Orphan Drug Designation Lists, as well as the Orphan Selection File, found on the 340B database, in order to assist all 340B stakeholders in complying with HRSA’s policy.


    340B hospitals subject to the orphan drug exclusion (critical access hospitals, free-standing cancer hospitals, sole community hospitals and rural referral centers) are responsible for ensuring that any orphan drugs purchased through the 340B Program are not transferred, prescribed, sold, or otherwise used for the rare condition or disease for which the orphan drugs are designated under section 526 of the Federal Food, Drug, and Cosmetic Act.


    RxS take on this…..despite HRSA pronouncement and clarification from Commander Pedley in DC and recent Federal Register notice, the manufacturers and wholesalers of orphan drugs  will de facto enable access in 340B marketplace to continue (or not) going forward. It is estimated that additional legal battles regarding the 340B Orphan Drug exclusion between manufactures and HHS/HRSA may ensue. Affected covered entities that lost 340B pricing access to Orphan drugs immediately after the federal judge’s ruling have again been able to purchase orphan drugs from wholesalers.


    HRSA’s interpretation of the 340B ruling still leaves unanswered questions and requires interpretation by the covered entity specifically regarding the exclusion of specific products based. To receive FDA orphan designation there must be:

    1). A drug or active moiety

    2). A sponsor or manufacturer that request the status

    3). A disease or condition that warrants orphan status.


    Since the sponsor requests and receives the FDA Orphan drug designation only the drug or active moiety associated with that sponsor request should be subject to the Orphan drug exclusion. For example, Pfizer pharmaceuticals pulmonary hypertension product Revatio (sildenafil) is on the orphan drug exclusion list however Revatio also has an equivalent generic and the active moiety is available as branded product Viagra (sildenafil) also with equivalent generics. Based upon how an orphan designation is requested only the branded Revatio product should be subject to the orphan exclusion based upon the patient diagnosis. Additional areas of confusion include what to do with designated orphan drugs that are associated with a manufacture that is no longer in business or a university that initially discovered the active moiety. The question remains if the drug (active moiety) is listed as orphan and associated with a sponsor that does not exist or is no longer associated with the product is it really an orphan drug that should be excluded? Overall it is recommended that the covered entity select a position when electing to carve-in 340B drugs and document the position/philosophy constantly in its policies and procedures and orphan drug review histories.