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ASHP Letter of Support for the Closing Loopholes for Orphan Drugs Act

Representatives Peter Welch and David McKinley

September 27, 2019

The Honorable Peter Welch
U.S. House of Representatives
2187 Rayburn House Office Building
Washington, DC 20515

The Honorable David McKinley 
U.S. House of Representatives
2239 Rayburn House Office Building
Washington, DC 20515

Dear Representatives Welch and McKinley:

On behalf of ASHP (American Society of Health-System Pharmacists), I am writing in support of
H.R 4538, the Closing Loopholes for Orphan Drugs Act. ASHP applauds your leadership on this issue.

ASHP is a national professional organization representing nearly 50,000 members including pharmacists, pharmacy residents, student pharmacists, and pharmacy technicians, who provide patient care services in acute care and ambulatory settings, including hospitals, health systems, and clinics. For more than 75 years, ASHP has been at the forefront of efforts to improve medication use and enhance patient safety.

The Affordable Care Act (ACA) added critical access hospitals (CAHs), sole community hospitals, rural referral centers, and free-standing cancer centers as covered entities eligible to participate in the 340B Drug Pricing Program. The ACA also stated that the newly added entities could not purchase “orphan drugs” at 340B prices. FDA orphan drug designation is given for a specific indication related to the treatment of a rare disease and confers benefits for pharmaceutical manufacturers, including fee waivers, market exclusivity, and tax credits. However, legally, orphan drugs can be approved and marketed for multiple indications, and they are commonly used to treat conditions beyond the rare disease for which the drug received orphan designation.

At present, CAHs, sole community hospitals, rural referral centers, and freestanding cancer clinics cannot purchase orphan drugs for any indication at the 340B price. This bill will allow these entities to purchase orphan drugs at 340B prices when the drugs are not used for the orphan indication. This compromise preserves the manufacturer benefits associated with the orphan designation, while increasing access to medically necessary treatment, particularly in rural and underserved communities. Further, the bill is consistent with the original congressional intent of the federal 340B program: ‘‘to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

ASHP thanks you for introducing this important legislation, and we look forward to working with you to move the bill forward. Please contact me with any questions or have a member of your team contact Doug Huynh, Director of Federal Legislative Affairs at 301-664-8806 or at [email protected].


Tom Kraus
VP, Government Relations