The American Hospital Association on July 19 told HRSA the Health Resources and Services Administration that it generally supports the agency's narrow interpretation of the Patient Protection and Affordable Care Act provision that excludes orphan drugs for purchase under the 340B drug discount program for newly eligible hospitals and rural referral centers. With the exception of inpatient drugs and outpatient orphan drugs, the ACA expands eligible participants in the 340B program to include hospitals that have disproportionate share adjustment percentages equal to or greater than 8%, critical access hospitals, certain non-prospective payment system free-standing cancer hospitals, sole community hospitals and rural referral centers.
The proposed rule's narrow interpretation would restrict the orphan drug exclusion to only those orphan drugs used to treat the rare conditions or diseases for which the drugs received the Food and Drug Administration's orphan drug designation. As proposed, the rule would permit newly covered entities to purchase outpatient orphan drugs at 340B discounted prices as long as they can demonstrate that the drugs are not used to treat the orphan drugs' designated rare conditions or diseases. In this case, the rule stipulates that hospitals would be required to maintain separate records to ensure compliance.
While the AHA believes that most newly eligible hospitals can comply with the new record keeping requirements, it recommends that HRSA exercise some flexibility in allowing hospitals to develop alternative tracking systems to monitor compliance with the orphan drug exclusion similar to alternative tracking systems that exists in the overall 340B program.
