Children’s hospitals gain legislative victory on 340B orphan drugs

Abstract

Children’s hospitals got an early holiday present from Capitol Hill—the passage of legislation that reinstates 340B discounts for orphan drug products. The Medicare and Medicaid Extenders Act of 2010, which included the 340B program correction, passed the House with a 409-2 vote and passed the Senate by unanimous consent. President Obama signed the bill December 15. The 340B program was created in 1992 to limit the cost of outpatient drugs purchased by participating federal grantees, health centers, and disproportionate share hospitals, the nation’s safety net for health care. Children’s hospitals became eligible to participate in 340B in the fall of 2009, when the Health Resources and Services Administration (HRSA) published guidelines for these hospitals [see March 1, 2010, AJHP news]. Steve Pate, manager of outpatient services at St. Jude Children’s Research Hospital in Memphis, Tennessee, said his hospital started participating in the 340B program on January 1, 2010. “We joined the program because it provided us with an opportunity to offset some of our indigent care drug cost,” Pate said.