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Washington Highlights

Interpretive Rule Clarifies 340B Orphan Drug Exclusion

July 25, 2014— The Department of Health and Human Services (HHS) published a July 23 Federal Register notice of an interpretive rule setting forth its interpretation of the orphan drug exclusion within the Health Resources and Services Administration (HRSA) 340B Drug Pricing Program. The clarification follows a May 23 U.S. District Court finding that HHS lacked the authority to issue an earlier final rule on the subject [see Washington Highlights, June 20].

Under the interpretive rule, HHS clarifies that the 340B orphan drug exclusion applies only “to drugs when they are transferred, prescribed, sold, or otherwise used for the rare condition or disease” for which those drugs received orphan drug designation (under Section 526 of the Federal Food, Drug, and Cosmetic Act).

If those drugs are used for other conditions or diseases, they are not excluded from the 340B Program. It adds that “drugs can have multiple indications, only some of which qualify for orphan designation.”

HHS also states that excluding all uses of drugs with orphan drug designation “would be contrary to the Congressional intent of section 340B(e) to balance the interests of orphan drug development and the expansion of the 340B Program” to children’s hospitals, free-standing cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals, as set forth by the Accountable Care Act (P.L. 111-148 and P.L. 111-152).


Christiane Mitchell
Senior Director Health Care Affairs
Telephone: 202-828-0461


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