340B hospitals laud bill that seeks to close orphan drug 'loophole'

September 28, 2016

Modern Healthcare (Livingston, 9/28) reported on the Closing Loopholes for Orphan Drugs Act (H.R. 6174), introduced by Rep. Peter Welch (D-VT) and Rep. Morgan Griffith (R-VA) which would extend discounts under the 340B program to orphan drugs in a bid to reduce prescription drug costs at rural and cancer hospitals and clinics. Welch states, "there's a loophole here and pharma is driving a huge truck through it." In October 2015 the federal court struck down HRSA's interpretation of the orphan drug rule and instead ruled that drug makers are not required to discount orphan drugs for cancer and rural hospitals. The new legislation would essentially allow HRSA to interpret the law the way it did before the court's October 2015 ruling. Hospitals and associations strongly support the new legislation while PhRMA is clearly opposed. Tom Nickels, AHA, said in a statement that "this legislation gives these hospitals the ability to utilize 340B discounts for orphan drugs when the drug is not used for its orphan indication and will increase access to critical services and treatments." PhRMA said in a statement that expanding the 340B program "would do little to help patients benefit from the program, given it does not require 340B discounts to be passed on to patients. Instead it further exacerbates existing market distortions created by the 340B program."