Pharm. Research & Mfrs. of Am. v. U.S. Dep’t of Health and Human Servs. — Oct. 2015 (Summary)

340B

Pharm. Research & Mfrs. of Am. v. U.S. Dep’t of Health and Human Servs.
No. 14-1685 (RC) (D.D.C. Oct. 14, 2015)

The United States District Court for the District of Columbia granted a motion for summary judgment filed by Pharmaceutical Research and Manufacturers of America (“PhRMA”) in a suit it filed against the United States Department of Health and Human Services (“HHS”) challenging an interpretive rule issued by HHS regarding the 340B discount drug program.

The 340B program places price caps on the medications that drug manufacturers sell to certain healthcare facilities, including Critical Access Hospitals (“CAHs”). However, a section of the Patient Protection and Affordable Care Act excluded CAHs from having 340B program pricing for medications designated as orphan drugs.

HHS issued an interpretive rule allowing CAHs to have 340B program pricing for an orphan drug when the orphan drug is used for a purpose other than the rare diseases for which it was developed and designated. PhRMA objected to this interpretive rule and moved for summary judgment, arguing that the rule was a final agency action that conflicted with the plain language of the 340B program statute.

The issue before the court was whether the orphan drug exclusion to the 340B program pricing for CAHs applied to any use of the orphan drug or whether the exclusion was limited to when the orphan drug was actually used for the rare disease or condition for which it has been designated.

The court granted PhRMA’s motion for summary judgment, holding that HHS’s interpretive rule was, indeed, a final agency action and that it contravened the plain language of the 340B program statute, which excluded any use of orphan drugs from 340B program pricing.