Orphan Drugs, 340B, and the Challenges of Implementing Health Reform
This article was originally published in RPM Report
A proposed rule issued by HRSA probably changes prescription drug spending in the US by about .005%. But it will have an impact on almost every pharmaceutical company pricing department, and offers a valuable illustration of some of the bigger themes of implementing the reform law overall.
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The health care reform law dramatically expanded the number of entities eligible to purchase drugs via the federally administered 340B program, while simultaneously increasing the size of the mandatory discounts given to covered entities. Manufacturers are understandably frustrated. Rather than hope for elimination of the program, however, they may be better served working within the system to contain its impact.
Nothing gets biopharma policy watchers more worked up than the potential that the Centers for Medicare & Medicaid Services will second-guess FDA approval decisions. In reality, though, CMS often has no choice but to apply its own interpretation to issues that also fall under FDA's jurisdiction-and the health care reform implementation is bringing more of those cases to the fore.
The 340B program got a lot of attention from pharmaceutical industry lobbyists during the health care reform debate. Now it may be getting more attention from the commercial side of the business. Expanded discounts remains a legislative threat—but increased sales to “safety net” purchasers is also a business opportunity.