Children’s Hospitals and Clinics of Minnesota Applauds Fix on “Orphan Drug” Coverage

Minneapolis, Minn. (Dec. 16, 2010) — Families who were facing the prospect of huge increases in the cost of life-saving drugs for their children can breath easier thanks to a new law that will preserve discounts on specialized, so-called “orphan drugs.”

The Medicare and Medicaid Extenders Act includes a correction to a legislative prohibition in the new health care law that was mistakenly applied to independent children’s hospitals. The prohibition resulted in the loss of access to discounts for orphan drugs under the 340B program which allows safety net providers, including children’s hospitals, to purchase outpatient pharmaceuticals at discounted rates.

Congress had inadvertently removed discounts on drugs used to treat diseases that affect small numbers of patients as part of the health reform package. This would have had a profound impact on kids. Many pediatric patients rely on drugs that may not be widely used for the general population but are critical to pediatric care.

Without the orphan drug discount under the 340B program, Children’s Hospitals and Clinics of Minnesota would have had to pay $1.5 million more per year for these critical treatments. The drugs that had been singled out as “orphan drugs” are used to treat a wide variety of conditions such as Rheumatoid Arthritis, Crohn’s Disease, Cystic Fibrosis, immune deficiency, and various types of cancer.

“The 340B discounts are vital for children’s hospitals who treat large numbers of low income patients like we do,” said Alan L. Goldbloom, M.D., president and CEO of Children’s of Minnesota. “We are thankful for the leadership of Senator Al Franken, Senator Amy Klobuchar, and the rest of the Minnesota delegation for their recognition of the importance of this fix, and for their persistence in getting it done.”

The 340B program provides discounts of up to 50 percent on drugs for health care providers who treat low-income patients.

About Children’s Hospitals and Clinics of Minnesota

Serving as Minnesota’s children’s hospital since 1924, Children’s Hospitals and Clinics of Minnesota has 332 staffed beds at its two hospitals in St. Paul and Minneapolis. An independent, not-for-profit health care system, Children’s of Minnesota provides care through more than 14,000 inpatient visits and more than 200,000 emergency room and other outpatient visits every year. Children’s is the only Minnesota hospital system to provide comprehensive care exclusively to children. For more information, visit