Opinion: The law has to catch up on orphan-designated drugs with multiple uses

John Mildenberger, a specialty pharmacy manager, senior clinical lead pharmacist, and community pharmacy compliance officer at Sidney Regional Medical Center in Sidney, Neb., argues that orphan-drug policy fails to account for drugs with multiple uses: Crohn’s disease is not juvenile idiopathic arthritis, but government policy treats a Crohn’s prescription as if it were for the orphan-designated rare disease. He writes from the perspective of a pharmacist who started a specialty pharmacy in a small town, where patients drive miles and hours to pick up medications such as Rinvoq rather than use remote mail-order pharmacies.

He says that although he is glad to dispense Rinvoq in person, he sometimes sells it at a staggering loss to the pharmacy. The reason is that Rinvoq carries an FDA orphan designation for juvenile idiopathic arthritis, which many of his patients do not have. Because his hospital is a critical access hospital, manufacturers can prevent him from buying any orphan-designated drug at the government discount price no matter what it is being used to treat; the designation follows the molecule, not the diagnosis, so a Crohn’s prescription is handled as though it were a juvenile idiopathic arthritis prescription.

The program at issue is 340B, a government drug discount program that allows discounted medications to be sold to hospitals and certain clinics called covered entities and lets them keep the profit to support medication access, service expansion, staffing, operations, and patient care. When the Affordable Care Act brought hospitals like his into the program in 2010, it included a caveat: some newly added covered entities, including critical access hospitals, were shut out of 340B pricing on drugs carrying an orphan designation, at manufacturers’ discretion. Orphan designation means the FDA has designated the drug to treat a rare disease or condition affecting fewer than 200,000 people in the United States. Many such medications have more than one use, and if a medication has an orphan designation, it does not have to be sold at 340B discount prices even when it is currently being used for a non-orphan indication, depending on the manufacturer.

HRSA has tried to fix this before. In 2013, the agency issued a rule saying the exclusion should apply only when an orphan drug is actually used for the rare condition it was designated for. A federal court vacated that rule in May 2014, holding that HRSA lacked the authority to issue it. HRSA reissued the same position.