What is a key fact in this story? (1)

**Rinvoq** carries an FDA orphan designation for juvenile idiopathic arthritis but is commonly prescribed for Crohn's disease; because the 340B exclusion follows the molecule rather than the diagnosis, critical access hospitals like Sidney Regional Medical Center in Nebraska lose money filling those prescriptions.

What is a key fact in this story? (2)

The **340B drug discount program**, expanded under the Affordable Care Act in 2010, allows manufacturers at their discretion to block critical access hospitals from buying orphan-designated drugs at the discount price—even when the drug is being used for a non-orphan condition.

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

Q: What happened in this Health story?

Nebraska pharmacist John Mildenberger argues the 340B orphan drug exclusion, which follows a drug's FDA designation rather than its actual use, costs critical access hospitals—and HRSA's 2027 rebate pilot doesn't fix the problem.

By STAT News · Summarized & edited by Kapil Samant · 2026-10-02

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

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Rinvoq carries an FDA orphan designation for juvenile idiopathic arthritis but is commonly prescribed for Crohn's disease; because the 340B exclusion follows the molecule rather than the diagnosis, critical access hospitals like Sidney Regional Medical Center in Nebraska lose money filling those prescriptions.
The 340B drug discount program, expanded under the Affordable Care Act in 2010, allows manufacturers at their discretion to block critical access hospitals from buying orphan-designated drugs at the discount price—even when the drug is being used for a non-orphan condition.
HRSA attempted in 2013 to limit the orphan exclusion to drugs actually used for their designated rare condition, but a federal court vacated the rule in May 2014 and again struck down the agency's 2015 interpretive guidance, holding only Congress could rewrite the statute.
On Aug. 3, HRSA announced a 340B rebate pilot effective Jan. 1, 2027: covered entities will buy at full wholesale price, submit claims-level data, and wait for a manufacturer-issued rebate; manufacturer participation is voluntary, but covered entities cannot opt out.
The pilot is narrow—covering only drugs on Medicare's 2026-2027 negotiated price list, which HRSA estimates at under 5.5% of 340B sales—and Rinvoq is not among them, though HRSA reserves the right to expand the model.
HRSA estimates the new reporting will cost covered entities roughly $34,000 per year per entity, with manufacturers funding the underlying IT platform; the author argues HRSA should add diagnosis to the claims data already being collected to fix the underlying mismatch.
A 2021 HHS Office of Inspector General report found that for Xgeva and Prolia, only about 1% of dispensed units went to their orphan-designated indications—evidence, the author says, that the exclusion's rationale rarely applies in practice.

Why it matters: The 340B orphan exclusion follows a drug's FDA designation rather than its actual clinical use, costing critical access hospitals like Sidney Regional Medical Center on common-condition prescriptions for drugs like Rinvoq, which carries an orphan designation for juvenile idiopathic arthritis. HRSA's 2027 rebate pilot covers under 5.5% of 340B sales and excludes Rinvoq, so unless Congress rewrites the statute to tie the exclusion to use rather than designation, small rural pharmacies continue absorbing the loss.