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Higher drug prices for rural hospitals keep them from providing critical care

Written by Diane Archer

Sarah Tribble reports for Kaiser Health News that particularly high drug prices for rural hospitals can keep them from providing critical care. For no clear reason, the ACA prevents rural hospitals from negotiating prescription drug discounts for many expensive drugs, as larger hospitals can do. Instead, rural hospitals must pay full price for “orphan drugs” that treat rare diseases and also may treat many common conditions.

The ACA prevents rural hospitals from participating in a federal drug discount program–the 340B program–intended to ensure that low-income patients receive needed hospital care. Instead, rural hospitals are often forced to pay many times more for a costly medication than other hospitals.

Many blockbuster drugs can be designated as orphan drugs, under the Orphan Drug Act, so long as they also treat rare diseases. So, rural hospitals are struggling to pay for the high-cost drugs that treat patients with rare diseases as well as patients with their common conditions. There are literally thousands of drugs designated as orphan drugs.

Without the benefit of a discount, rural hospitals are hard-pressed to stock orphan drugs, leaving patients with urgent and emergency stroke, cancer and other needs without needed care. For example, a single dose of the stroke medication, Activase, cost one rural hospital $8,010 and the larger hospital $1,600. 340B program discounts are often significant, according to a GAO report.

In fact, having to pay high prices for orphan drugs is forcing some rural hospitals to close entire hospital units. Consequently, patients needing these drugs must travel far from home to get needed care that their local hospital should be able to provide.

No one is taking responsibility for the ACA exclusion of orphan drugs from the 340B program for rural hospitals. The provision was never even discussed in Congress but somehow slipped into the legislation. That said, Pharma invested heavily in ensuring that rural hospitals were denied drug discounts for rare disease drugs after the ACA was passed.

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