Orphan Drugs: The Current Firestorm, a Real Evergreening Issue, and a Possible Solution

Periodically, legislators and others become concerned about reports citing the high price of some orphan drugs, including drugs that achieve blockbuster status (earning more than $1 billion a year). Several proposals have been introduced in response to such concerns.  In 1990, Congress passed legislation that would have limited market exclusivity in some circumstances, but the President vetoed it.

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Critics in Congress and in the pharmaceutical industry and patient groups say that while the [Orphan Drug Act] has generally worked, it has proved to be a bonanza for the makers of some very big drugs, allowing them to charge higher prices than there would have been with competition.

With all of the recent hubbub around orphan drugs and pricing, you might think the two quotes above were ripped from recent stories. In fact, the first quote is taken from a 2010 Institute of Medicine report, titled “Rare Diseases and Orphan Products: Accelerating Research and Development” (see our previous post here).  The second quote is from an April 1990 article in the New York Times, titled “Orphan Drug Law Spurs Debate.”  The fact that you likely could not identify the age of the quotes above means that we’re in the midst of another one of those “periods” referred to in the IOM report, where legislators take a look at the Orphan Drug Act to decide whether or not changes need to me made to the law.

The latest round of interest started perhaps within the past two years, as legislators began consideration of legislation – the “Orphan Product Extensions Now Act,” or “OPEN Act” – to amend the FDC Act to provide a 6-month extension of exclusivity periods for companies that obtain approval of a previously approved drug for a new, rare condition. (By the by, the OPEN Act was reintroduced in February as H.R. 1223, the “Orphan Product Extensions Now Accelerating Cures and Treatments Act.”)  Then there was an article in 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.”  A report from Public Citizen on the OPEN Act, titled “House Orphan Drug Proposal: A Windfall for Pharma, False ‘Cure’ for Patients” (see our previous post here), followed.  Then things calmed down a bit . . . .  until recently.

In January 2017, Kaiser Health News published a report, titled “The Orphan Drug Machine: Drugmakers Manipulate Orphan Drug Rules To Create Prized Monopolies.”  That report caught the attention of Senator Chuck Grassley (R-IA), who stated  that he would explore possible misuses of the orphan drug program.  Then last week, Sen. Grassley (along with Senators Orrin Hatch (R-UT) and Tom Cotton (R-AR)) sent a letter to the Government Accountability Office (“GAO”) requesting certain information (much of which is already publicly available) and an investigation into “whether the [Orphan Drug Act] is still incentivizing product development for diseases with fewer than 200,000 affected individuals, as intended, and provide any regulatory or legislative changes that may be needed in order to preserve the intent of this vital law.”  The letter to GAO states the Senators’ general concern: so-called “evergreening” of orphan drug exclusivity.

While few will argue against the importance of the development of [orphan] drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process.

A review of FDA’s Orphan Drug Designations and Approvals Database shows that there are many, many drugs and biological products with multiple orphan drug designations and/or approvals.  In some cases, there are just a couple of entries on the list for the same drug.  In other cases, such as with Imatinib and Ibrutinib, there are quite a few entries.

In most cases, a single period of 7-year orphan drug exclusivity extends from a single orphan drug designation granted by FDA’s Office of Orphan Products Development. Each designation covers a different orphan disease or condition.  And once the first period of orphan drug exclusivity expires, FDA may be able to approve an ANDA for a generic version of the drug product with labeling that omits information on a subsequent use protected by orphan drug exclusivity.  This carve-out option has been affirmed by FDA in various Letter Decisions and Citizen Petition response, and by the courts – see, e.g., Sigma-Tau Pharmaceuticals, Inc. v. Schwetz, 288 F.3d 141 (4th Cir. 2002) (here).

If the reference in the letter to the GAO to “multiple designation allowance” that “some pharmaceutical manufacturers might be taking advantage of” is merely a concern with multiple orphan drug designations that lead to separate grants of orphan drug exclusivity for separate diseases or conditions, then this blogger does not see a particular need for concern. It’s not an evergreening issue at all!  The Orphan Drug Act is working exactly as intended, and generic competition is generally not thwarted because of the ability of an ANDA applicant to carve-out of its labeling (and thus avoid) a period of unexpired orphan drug exclusivity on the brand-name Reference Listed Drug.

But there may be a real evergreening issue that’s probably been overlooked by most folks. In some cases, a single orphan drug designation can result in multiple periods of orphan drug exclusivity.  (A table of examples is provided at the end of this post.)  FDA explained this concept in the preamble to the Agency’s October 2011 proposed orphan drug regulations:

The scope of orphan exclusive approval for a designated drug is limited to the approved indication or use, even if the underlying orphan designation is broader. If the sponsor who originally obtained orphan exclusive approval of the drug for only a subset of the orphan disease or condition for which the drug was designated subsequently obtains approval of the drug for one or more additional subsets of that orphan disease or condition, FDA will recognize orphan-drug exclusive approval, as appropriate, for those additional subsets from the date of such additional marketing approval(s).  Before obtaining such additional marketing approval(s), the sponsor in this instance would not need to have obtained additional orphan designation for the additional subset(s) of the orphan disease or condition. [(Emphasis added)]

In most instances, multiple and staggered periods of orphan drug exclusivity stemming from the same designation do not stymie generic competition. For example, if FDA grants an orphan drug designation for Drug X for Disease Y and the sponsor first obtains approval of the drug for use in adults with Disease Y and then later for the same drug for use in children with Disease Y, FDA would grant two separate periods of orphan drug exclusivity – one for each approval.  An ANDA applicant may obtain approval of the drug for the adult population indication once the initial period of orphan drug exclusivity expires, and then later for the pediatric population indication once that second period of orphan drug exclusivity expires.

But not all cases are as easy as the one above. You see, indications, like Pokémon, can evolve into something new.  There appear to be a growing number of cases where FDA has granted multiple periods of orphan drug exclusivity based on the same original orphan drug designation, and where the drug’s indication evolves into something new, shedding and subsuming the previous indication statement.  This could occur, for example, as different disease stages or different lines of therapy are approved.  (Some possible examples of this might be in the cases of Ibrutinib, Cinacalcet, Bortezomib, and Bevacizumab.)  As the old labeling is shed, the new labeling may not allow for an ANDA (or biosimilar) applicant to easily (if at all) omit information protected by a new 7-year period of orphan drug exclusivity.

But is the solution to what may be a real evergreening problem opening up the Orphan Drug Act? This blogger thinks that there could be a better solution.  If the issue preventing a carve-out is the text of the brand-name drug labeling, then one remedy is to have better communication between the Office of New Drugs (“OND”) and the Office of Generic Drugs (“OGD”) during the course of brand-name drug labeling reviews and drafting.  OGD’s experience with labeling reviews and carve-outs should not be overlooked, and can lead to labeling that does not cause carve-out controversies years down the road.  Another possible remedy is for OGD to take a broader view of permissible labeling changes.  That is, considering so-called labeling “carve-ins” that clarify the omission of other labeling information (and effectively return an indication to its previous state).  It’s a topic FDA raised a few years back (see our previous post here), but that the Agency ultimately decided not to address.

Multiple Orphan Drug Exclusivity Periods Based on a Single Orphan Drug Designation