Disclaimer: Nothing here is intended to be construed as legal advice. As always, consult a qualified attorney for all matters involving interpretation and application of laws and regulations, as well as identifying laws applicable to your situation.
In July of 2014, HRSA’s Office of Pharmacy Affairs issued guidance that designated orphan drugs should be made available at 340B prices when used to treat conditions for which the drug’s orphan designation does not apply. The Supreme Court has challenged HRSA’s rule-making authority since that time, but HRSA has reiterated its interpretive rule.
The challenges for 340B covered entities attempting to comply with the orphan drug exclusion are two-fold: First, the list of orphan drugs issued by HRSA is description-based, and does not include NDCs necessary to definitively identify which drugs carry the orphan exclusion and should therefore be excluded from the program. Second, a covered entity wishing to obtain 340B pricing on orphan-designated drugs used for non-orphan conditions must match the dispenses of the drug against patient diagnoses to identify the context of “usage”.
Solving the second problem is not without challenge, but it is possible to exclude all orphan drugs regardless of their use. This limits some 340B usage which the OPA has declared could be claimed, but provides the safety of assuring that the orphan drug exclusion has not been violated. Many covered entities are choosing this path. Those seeking 340B pricing for these drugs are either checking on usage manually, or utilizing ICD-9 or ICD-10 codes.
Assuring an accurate list of the orphan drugs themselves is harder and more important. Although the list of orphan drugs changes only quarterly, new NDCs may be issued within a quarter which refer to items on the existing list. A covered entity must actively keep up to date with new NDCs to assure that they are not a match for an item on the orphan list. We’ve found that wholesalers have sometimes offered their own lists of orphan drugs by NDC. This can be very helpful, but the fact that HRSA is not doing this mapping itself means that responsibility for identifying every orphan drug still rests with the covered entity. Consultants, vendors, and wholesalers are not able to offer a government-sanctioned list. Similarly, we’ve found that the FDA’s identification of orphan drugs is lacking in their public database.
We spoke with OPA in March of 2015 and were told that the office is “working on it”. While OPA is aware of the need to match drugs to NDCs for definitive identification, covered entities must actively manage this list for now, even if they plan to exclude all orphan drugs.