HRSA Rule Clarifies Hospitals' Ability to Purchase Orphan Drugs at Discount

A new regulation will allow certain hospitals to buy orphan drugs at deeply discounted prices if they're used to treat non-orphan conditions or diseases.

A new regulation will allow certain hospitals to buy orphan drugs at deeply discounted prices if they're used to treat non-orphan conditions or diseases.

The rule, issued earlier this week by the Health Resources and Services Administration, seeks to clarify a statute that excluded these facilities from purchasing drugs designated for a rare disease or condition at 340B prices.

The 2010 healthcare reform law expanded 340B eligibility to critical-access hospitals, sole community hospitals, rural referral centers and free-standing cancer hospitals. It also included a provision that excluded these four types of providers from using 340B pricing to buy orphan drugs, which are used to treat to rare diseases and conditions that affect fewer than 200,000 patients.

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Source: Modern Healthcare

The 340B federal drug discount program requires drug manufacturers to provide eligible healthcare providers with discounts on what are called covered outpatient drugs. The discounts are intended to aid providers that serve uninsured, indigent patient populations by permitting them to use the savings and revenue generated by the discounted prices to improve patient care and services.