The Orphan Drug Wars: HHS Interpretive Rule Clarifies Orphan Drug Exclusion


On July 21, 2014, the U.S. Department of Health and Human Services (HHS) released an “Interpretive Rule” in response to a recent U.S. District Court decision that vacated the July 23, 2013, orphan drug rule on the grounds that HHS lacked the statutory authority to promulgate the rule. See PhRMA v. HHS, No. 13-01501 (D.D.C. May 23, 2014). However, according to HHS, the court’s decision in PhRMA v. HHS did not invalidate the agency’s interpretation of the orphan drug exclusion or prohibit related guidance, such as the Interpretive Rule, which, according to HHS, further explains how the agency will interpret and implement section 340B(e) of the Public Health Service Act (PHSA). 42 U.S.C. 256b(e). For more information, please see related blog postings.

The Interpretive Rule clarifies that HHS interprets section 340B(e) of the PHSA as “excluding drugs with an orphan designation only when those drugs are transferred, prescribed, sold, or otherwise used for the rare condition or disease for which the drug was designated under section 526 of the Federal Food, Drug and Cosmetic Act (FFDCA).” In other words, “[t]his section of the PHSA does not exclude drugs that are transferred, prescribed, sold, or otherwise used for conditions or diseases other than for which the drug was designated under section 526 of the FFDCA.”

The effective date of the Interpretative Rule is July 21, 2014. Consequently, pharmacies and other healthcare providers will need to ensure that they follow the Interpretive Rule when utilizing 340B pricing in the future.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:


BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.