Rep. Peter Welch (D-Vt.) proposed legislation in Vermont to close a loophole in the federal drug discount program that hikes up the prices of prescription drugs for rural hospitals, according to VT Digger.
The 340B Drug Pricing Program requires pharmaceutical companies to provide drugs at reduced prices to certain safety-net providers; however, drug companies can deny discounts for orphan drugs that treat rare diseases. This creates a loophole in the law that lets drug companies broadly define which drugs they discount, according to the report.
The Closing Loopholes for Orphan Drugs Act would lower drug prices for rural hospitals by clarifying the definition of an orphan drug, which would prevent companies from denying numerous discounts.
"Vermont's community hospitals rely heavily on savings from federally mandated discounted prescription drugs to provide high quality affordable health care in the communities they serve. My legislation would close a loophole that allows drug companies to deny discounts for certain drugs," Mr. Welch said in a press release.