Are Biopharmas Abusing the Orphan Drug Act? Or Not?

Biopharmas have been accused of abusing the orphan drug program, meant to help those who have no other alternative. But is it so?

The equation that has been presented is fairly simple: the Orphan Drug Act provides significant incentives for biopharmas to develop drugs when the number of those affected by the disease is under 200,000 and the drug, consequently, is unlikely to make the company a lot of money; some biopharmas have received the orphan drug designation for drugs that were originally approved by the FDA for the mass market and consequently weren’t created for the particular disease; others have received a number of orphan drug designations for different uses of the same drug; and some orphan drugs cost a great deal of money.

This has led to articles--in the Washington Post in August and in Kaiser Health News on Jan. 17--that suggest that some biopharmas are gaming the system: receiving the incentives under the ODA for drugs that weren’t developed as orphan drugs, charging high prices for the drugs and making a great deal of money.

I received responses to my requests for comment from the FDA, attorneys who represent biopharmas and the companies themselves. The reaction from all groups is that the ODA has enabled the development of treatment for those that were not receiving treatments before. FDA said they would look into the expressed concerns. Attorneys and biopharma executives encouraged FDA to do so.

They also provided additional perspective. For example, a representative for the Pharmaceutical Research and Manufacturers of America told me, “what is not often considered is the uncertain path of scientific discovery” and that, “in some cases a company researching a compound for a rare disease may find potential for another indication and pursue clinical trials for broader or additional orphan indications, each of which requires additional clinical trials and are conducted with no guarantee of FDA approval.”

Judith Hasko, an attorney with Latham & Watkins, Menlo Park, Calif., told me that the data must be broken down into more detail and also that, “the Orphan Drug Act has provided valuable incentives for developing products benefitting patients without alternative treatment options in a high risk industry.” Given the success of those incentives to date, “any adjustments to the law should be undertaken carefully after sufficient analysis and discussion with all stakeholders.”

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