NORD: Rare Disease Patients Face Access Crisis Under New Gov't Payment Rules; Congress Must Act to Overturn Rates Before Jan. 1

11/4/2002

From: Diane Dorman of the National Organization for Rare Disorders, 202-496-1296 (office) or 202-258-6457 (cell)

DANBURY, Conn., Nov. 4 -- Regulations published on October 31, 2002 by the federal Centers for Medicare and Medicaid Services (CMS) will result in reduced access for thousands of patients with rare diseases. The new rules - for the Medicare Hospital Outpatient Prospective Payment System (HOPPS) - take effect on January 1, 2003, unless Congress enacts changes during the upcoming post-election session.

The agency identifies only three orphan drugs that "will no longer be paid under the OPPS and will be reimbursed on a reasonable cost basis." These drugs treat Type I Gaucher Disease, alpha-1-antitrypsin deficiency, and acute myelogenous leukemia. Many orphan products will be paid under the HOPPS payment system substantially below hospital costs. NORD estimates that nearly 100 injectable and intravenous orphan drugs will fall into this category, and many Medicare patients may not have access to them.

"Our preliminary analysis shows that the rates in this regulation are generally below hospital acquisition costs. Hospital outpatient clinics will continue to stock larger volume, more widely used products. Orphan products will be left out in the cold," said Abbey Meyers, President of NORD. "Too many hospitals will not stock orphan drug products if they know that they will lose thousand of dollars on each rare disease patient that they serve."

Orphan products are used by rare disease patients, and their use is highly variable from one hospital outpatient center to another. They include biologicals and drugs for the treatment of metastatic osteogenic sarcoma, dystonia and acute intermittent porphyria. All will become less available for Medicare recipients when the regulation and its payment rates become effective in January 2003.

"This rule runs counter to Congressional intent to encourage development of treatments for rare diseases and assure access for patients. Twenty years ago, Congress set this course with the Orphan Drug Act, and has consistently reinforced its commitment ever since," said Diane Dorman, Vice President for Public Policy at NORD. "The HOPPS regulation invalidates everything patients have fought so hard to achieve. Congress must act to stop this."

NORD is proposing that orphan drugs and biologicals with annual Medicare hospital outpatient claims volume of 30,000 or fewer visits should be excluded from HOPPS payment schedules without requiring administrative review of specific indications. For the handful of products above that threshold, new codes are proposed to separate orphan uses from more common uses.

Overall, the NORD proposal would cover only a small fraction of Medicare's total current spending on drugs and biologicals in the hospital outpatient setting.

"This regulation means that rare disease patients may need to go to hospitals distant from their community, and for some it will mean that they can't get their medication at all. We have no intention of standing by while lives hang in the balance," continued Dorman. "We'll continue to work with Congress to make sure that rare disease patients can get the treatments they need to sustain life and improve the quality of their lives."

NORD is a federation of approximately 125 voluntary health organizations and over 60,000 patients, healthcare providers, and individuals dedicated to helping people with rare "orphan" diseases. NORD is committed to the identification, treatment, and cure of rare disorders through programs of education, advocacy, research, and service.

Note to editors: Ms. Meyers and Ms. Dorman are available for interviews, as well as patients with rare diseases.