340B Health

340B Health Statement on Legislation to Close the 340B Orphan Drug Loophole

in 340B Health News Releases

June 14, 2017—340B Health endorses Reps. Peter Welch (D-Vt.) and Gregg Harper’s (R-Miss.) bipartisan billH.R.2889 The Closing Loopholes for Orphan Drugs Act, to limit the 340B drug discount program's orphan drug exclusion. The 340B program helps hospitals serve low-income and rural patients. Reps. Welch and Harper’s bill would allow rural and cancer hospitals in 340B to access discounted prices on orphan drugs when they use the drugs for non-orphan diseases or conditions. Because orphan drugs are among the most expensive drugs on the market and can cost patients up to $840,000 per year, this bill would significantly reduce costs for these hospitals, helping them keep their doors open and enabling patients to access affordable medications and services. Just yesterday, Allan Coukell, Senior Director of Health Programs for the Pew Charitable Trusts, recommended to Congress limiting the 340B orphan drug exclusion in testimony during a Senate Health, Education, Labor, and Pensions Committee hearing on rising drug prices.

Many rural hospitals are in poor financial health and struggling to survive. Nationwide, 80 rural hospitals have closed since 2010 and 673 more – over one-third of all rural hospitals in the country – are in danger of going under.

Orphan drugs are often used for non-orphan purposes. Rituxan, one of the world's top selling cancer drugs, has an orphan designation for a type of non-Hodgkin's lymphoma, for example. But it also is a first-line treatment for rheumatoid arthritis. Under the newly introduced legislation, 340B pricing would be available when Rituxan is used to treat rheumatoid arthritis, but not for non-Hodgkin’s lymphoma. More and more orphan drugs are coming on the market. Almost half of the new drugs approved by the FDA in 2016 had orphan designations.

Contact Tom Mirga at tom.mirga@340bhealth.org or 202-552-5853.

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