Denial of Orphan Drugs in 340B Program Could Cost Owner Hospitals $109 Million in Potential Savings
July 25, 2010
Posted by chcablogadmin in : Group Purchasing, Healthcare Reform
Please read and consider John’s important call-to-action regarding 340B and orphan drugs vital to our children’s hospitals. — Don
- John VanEeckhout, VP, Clinical Services, CHCA
As you will recall, a significant amount of potential savings for children’s hospitals in the 340B outpatient program is derived from a group of drugs known as orphan drugs. These drugs are developed for treatment of small populations of patients with diseases requiring very expensive therapeutic interventions. These drugs have patent protection, meaning that they are not offered under contracts with GPOs. For example, Nitric Oxide, used exclusively in inpatient treatment, is designated as an orphan drug and has the highest profile among CHCA hospitals. Current Health Care Reform (HCR) reconciliation legislation excludes orphan drugs from the 340B program for children’s hospitals. According to CHCA analyses, of the total $545 million pharmacy spend, orphan drugs represent $211 million (39%). If orphan drugs were to be included in the 340B program, the $211M spend would be approximately $102M; excluding them denies CHCA children’s hospitals the opportunity to save $109M.
CHCA and NACHRI continue to work cooperatively to overturn this unfavorable legislative action. Keep in mind that prior to March 30, 2010 when HCR reconciliation was passed by Congress, children’s hospitals were eligible to unrestricted access to orphan drugs through 340B. This very negative outcome from HCR legislation has resulted in children’s hospitals being denied access to this drug class. CHCA and NACHRI have been in discussions with the Office of Pharmacy Affairs (OPA) of the Health Resource and Service Administration (HRSA) that oversee the 340B program. To date, OPA and HRSA have offered no meaningful direction concerning children’s hospitals’ claims that we are being denied access now even though we were provided access to the orphan drugs with original legislation. As a result, drug manufacturers are beginning to deny access to 340B pricing on products based upon the new legislation. Several legislative initiatives to address this issue have failed to make it out of committee. If CHCA Owner Hospitals cannot make a meaningful lobbying effort to change current legislation, we will never realize these critical savings opportunities.
Call-to-Action of CHCA Owner Hospitals
- Mobilize your government affairs departments to solicit support for change in 340B legislation with your congressional representation from your states and districts.
- Implore NACHRI and other lobbying entities to redouble their efforts to contact key congressional Committee Chairs such as Representative Henry Waxman (D-CA), House Energy and Commerce Committee, and Senator Max Baucus (D-MT), Senate Committee on Finance, to remedy the change created by HCR reconciliation.
- Ask your congressional representatives to send letters to HHS Secretary Kathleen Sebelius to delay HRSA implementation of any action or promulgation of rules surrounding the 340B changes because of HCR reconciliation.
- Contact local and national advocates who work in promoting children’s health issues since this legislation may deny some children the therapy they need to maintain health and wellness.
Please keep me informed of your efforts in this area, or contact me directly with questions: john.vaneeckhout@chca.com.
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