by Admin | July 22, 2011 8:21 pm
Editors’ note: The federal government has begun releasing public comments on an important proposed regulation to implement health care reform’s limit on rural and free-standing cancer hospitals’ access to 340B pricing on orphan drugs. This is the first in a series of articles on 340B stakeholders’ reactions to the proposed rule. Check back with the Monitor in the coming days for reports on comments from the drug industry, additional health care providers, and others interested in the 340B program.
July 22, 2011—In written comments[1] this week on a closely watched proposed federal regulation, the leading advocacy group for 340B hospitals applauded the Health Resources and Services Administration’s (HRSA) decision to clarify the scope of the restriction on rural and free-standing cancer hospitals’ access to 340B pricing on orphan drugs.
While Safety Net Hospitals for Pharmaceutical Access (SNHPA) said it continues to believe that Congress should repeal the restriction altogether, it said HRSA’s decision to limit the orphan drug exclusion to situations when orphan drugs are used for orphan indications “represents legislative intent and is consistent with the purpose of the 340B program.”
In its letter to HRSA, SNHPA noted that the harm the orphan drug exclusion poses to rural and cancer hospitals “clearly outweighs any benefit to drug manufacturers” and will grow as the Food and Drug Administration ramps ups its efforts to approve more orphan drugs. Legislation to repeal the exclusion and extend 340B discounts to inpatient drugs is expected to be introduced in Congress soon.
July 19 Deadline
July 19 was the deadline for public comments on the proposed regulation[2], which will implement health care reform’s prohibition on 340B discounts for orphan drugs purchased by hospitals that became eligible for the program under reform. Drug manufacturers and other health care provider groups also submitted comments on the rule, which will be the first ever for the 340B program. The Monitor will report on other stakeholders’ submissions to HRSA in the coming days.
HRSA’s proposed rule would limit the prohibition on 340B pricing “to uses for the rare disease or condition for which the orphan drug was designated.” For example, this means rural and cancer hospitals would be free to purchase Remicade at its 340B price if they do not use the drug to treat any of its six orphan indications: juvenile rheumatoid arthritis, giant cell arteritis, pediatric ulcerative colitis, Crohn’s disease, pediatric Crohn’s disease, and chronic sarcoidosis. The hospitals will have to put in place “tracking and recordkeeping requirements to demonstrate compliance with the limits on the use of orphan drugs,” the proposal states.
Indication-Specific Compliance Possible
In its letter, SNHPA said its member hospitals report that in nearly all cases “they would be able to ensure, on a drug-by-drug basis,” that they do not use orphan drugs bought at 340B prices to treat orphan indications. When they cannot use diagnosis codes to match an orphan drug to an orphan condition either manually or using computer software, “hospitals report that they will either contact the patient’s physician or simply not use 340B pricing for that drug,” the group said.
SNHPA requested that hospitals that would have difficulty tracking orphan drug utilization on a drug-by-drug basis—particularly smaller hospitals for which the cost of compliance would outweigh the benefits of participation—be allowed to establish alternative tracking systems subject to HRSA approval.
SNHPA also noted that 340B contract pharmacies dispense few orphan drugs because most of these medicines are physician-administered. “For those relatively few orphan drugs that are dispensed by contract pharmacies, hospitals report to us that they intend to block those drugs from being filled using 340B pricing,” the group said.
No Limit After Exclusivity Ends
SNHPA asked HRSA to clarify several points in its proposal. For example, it asked the agency to make it clear that rural and cancer hospitals would be free to use 340B-purchased orphan drugs for the medicines’ orphan indications after the drugs’ seven year period of market exclusivity ends. It similarly asked HRSA to clarify that when an orphan drug is made by multiple manufacturers, the restriction on discounts for rural and cancer hospitals applies only to the version produced by the manufacturer that sought and obtained the drug’s orphan designation.
SNHPA also asked HRSA to issue informal guidance informing manufacturers that they must sell orphan drugs at a discount to rural and cancer hospital immediately during the period before the regulation becomes final and that they could be fined for failing to do so. In its final rule, SNHPA said, HRSA should make it clear that hospitals are entitled to retroactive relief from those drug manufacturers that have withheld 340B pricing on orphan drugs as a result of the orphan drug exclusion.
Source URL: https://340binformed.org/2011/07/340b-hospitals-say-they-can-comply-with-orphan-drug-exclusion-rule/
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