U.S. Sen. Jacky Rosen (D-Nev.) has introduced legislation to help nonprofit drug companies compete in the market with their for-profit counterparts.
Rosen’s bill S. 2257, the Expanding Access to Affordable Prescription Drugs and Medical Devices Act, would make it simpler for nonprofit manufacturers to obtain tax-exempt status from the Internal Revenue Service. It would also create a low-interest loan program and a federal cooperative agreement funding program (the latter, a type of grant program in which the federal awarding agency collaborates with the grantee on the project). The loans could be up to $5 million per borrower. The grants would support bringing an eligible drug or medical device to market within five years.
Participating manufacturers would have to be U.S.-based. Priority for grants and loans would be given to entities expected to take eligible drugs or devices to market at a lower price than existing treatments for the same disease or condition, or for drugs or devices identified as a public health priority by the U.S. Health and Human Services (HHS) Secretary.
“Whether it’s access to cancer-treating medication or insulin pumps, my legislation would help reduce costs and improve the domestic supply chain by providing support to nonprofit pharmaceutical and medical device manufacturers in an effort to bring more medications and devices to market at a reasonable price,” said Rosen, who sits on the Senate Health, Education, Labor and Pensions (HELP) Committee and the Senate Special Committee on Aging. The HELP committee has jurisdiction over the 340B program.
Rosen’s bill follows a number of recommendations made by a 2019 report published by Waxman Strategies, founded by retired House Energy & Commerce Chair Henry Waxman (D-Calif.). Waxman was the lead House sponsor of the 340B law and chaired the House Energy and Commerce Committee when the 340B program was expanded in 2010 as part of the Affordable Care Act.
“Nonprofit pharmaceutical organizations are positioned to help address the affordability gaps that remain in the U.S. pharmaceutical market and increase the access that American consumers have to affordable prescription drugs,” Waxman said in a statement. I believe the ‘Expanding Access to Affordable Prescription Drugs and Medical Devices Act’ is the right first step to support and encourage the manufacturing of pharmaceutical products on a nonprofit basis.”
Top executives at nonprofit drug firms also hailed the bill.
“As a nonprofit generic drug company established to tackle chronic drug shortages, we applaud Senator Rosen for developing legislation that will help us and others serve patients,” said Martin VanTrieste, President and CEO of Civica Rx. “For us, serving patients means making quality medicines accessible and affordable to everyone.” Civica was founded by a number of large health systems including some 340B systems and three philanthropies that have advocated for drug pricing reform.
“The battle for lower drug prices and greater access to lifesaving medicines can only be won if there are competitors on the field who force the issue, by providing truly competitive products to the market,” said Michael Hufford, CEO of Harm Reduction Therapeutics. “This pioneering legislation is the first step in clearing the path for nonprofit pharmaceutical organizations to advance their missions to address the systemic issues in drug supply, access, and affordability,” said Andrea Olariu, M.D., interim CEO of Medicines360.
