The 340B orphan drug exclusion incentivizes manufacturers to get orphan designations for drugs approved to treat common diseases or conditions, a new government report says.

Drug Manufacturers May Seek Orphan Designations to Avoid Paying 340B Discounts, HHS OIG Concludes

The ban on 340B discounts on orphan drugs for rural and free-standing cancer hospitals may give drug companies a powerful incentive “to seek orphan designation for drugs approved to treat common diseases or conditions,” the U.S. Health and Human Services Department Office of the Inspector General (OIG) says in a new report.

Congress made free-standing cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals eligible for 340B drug pricing in 2010. At the same time, it said manufacturers do not have to provide 340B pricing to these hospitals on drugs designated for a rare disease or condition.

The ban on 340B discounts on orphan drugs for rural and free-standing cancer hospitals may give drug companies a powerful incentive “to seek orphan designation for drugs approved to treat common diseases or conditions,” the U.S. Health and Human Services Department Office of the Inspector General (OIG) says in a new report.

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