Orphan Drugs Under Fire: Recent Reports Reject Call for Additive Exclusivity & Urge Orphan Drug Act Reforms

By Kurt R. Karst –      

Earlier this week, Public Citizen announced the release of a report, titled “House Orphan Drug Proposal: A Windfall for Pharma, False ‘Cure’ for Patients,” that takes aim at a particular provision in the 21st Century Cures Act (H.R. 6) that the U.S. House of Representatives passed in July 2015.  The report comes out at a time when the debate over drug pricing in Congress has reached fever pitch, and shortly after the publication of an article in the American Journal of Clinical Oncology alleging that companies are exploiting the Orphan Drug Act, which President Ronald Reagan signed into law on January 4, 1983 (and that some have referred to as one of the most successful pieces of FDA legislation in the history of food and drug law).  

Section 2151 of the Cures Act, titled “Extension of Exclusivity Periods For A Drug Approved For A New Indication For A Rare Disease Or Condition,” but known more popularly as the “Orphan Product Extensions Now Act,” or “OPEN Act,” would amend the FDC Act to provide a 6-month extension of exclusivity periods – what we’ve referred to as “exclusivity stacking” – for a drug approved for a new indication for a rare disease or condition (i.e., so-called “repurposed” drugs).  The OPEN Act is intended to increase the number of rare disease therapies and to address off-label reimbursement problems faced by rare disease patients.  We previously discussed the OPEN Act in posts here and here.

According to Public Citizen, “the current orphan drug approval system is hardly in need of a stimulus, as companies are pursuing, and achieving, orphan drug approvals at record rates.”  Moreover, says Public Citizen, the OPEN Act “is emblematic of the false hope offered more broadly by the 21st Century Cures legislation.”  Specifically, the OPEN Act would, according to Pubic Citizen:

result in higher drug prices for both orphan and non-orphan diseases: Conservatively, the provision would cost the public close to $4 billion, but given the structure of the financial incentive, the cost could easily approach $12 billion.  The new incentive would further distort existing incentives by encouraging pharmaceutical companies to spend money repurposing old drugs, rather than investing in truly innovative new drug development.  And it encourages more investment in a flawed system that effectively lowers FDA standards for approval and allows for considerable abuse.  Worst of all, the costs of the new incentive would fall not only on taxpayers but also on the backs of patients with common, non-orphan diseases, who will be denied potentially life-saving, affordable generic medicines for six additional months.

Just last month, several folks from the Johns Hopkins University School of Medicine penned a piece for the American Journal of Clinical Oncology, titled “The Orphan Drug Act: Restoring the Mission to Rare Diseases,” alleging that companies are “gaming” the orphan drug system established by the Orphan Drug Act “to use the law for mainstream drugs.”  According to the authors, although the Orphan Drug Act has been successful in getting therapies approved for otherwise overlooked populations, “evidence demonstrated that the [Orphan Drug Act] is often abused.”  The authors point to drugs and biologics approved for a rare disease, but that are used more broadly (for prevalent conditions and diseases) as evidence of this alleged abuse.  (We’ve seen these and other criticisms of the Orphan Drug Act before, which led to the introduction of legislation that was not ultimately enacted – see, e.g., here.) 

In the end, the authors of the article say that the Orphan Drug Act needs to be reformed . . . and they make some suggestions: “(1) increased submission scrutiny to ensure that benefits are allocated to drugs truly intended to treat orphan disease; (2) stratified benefit systems; (3) decreased exclusivity periods when benchmark profits are achieved; (4) decrease benefits to drugs that reach a much larger target populations [sic]; and (5) increased price transparency.” 

So it seems that orphan drugs are under attack from both ends of the spectrum: on the one hand, drugs approved for prevalent uses repurposed for rare conditions, and, on the other hand, approved orphan drugs repurposed for prevalent conditions.