Orphan Drug Act of 1983
|Long title||An Act to amend the Federal Food, Drug, and Cosmetic Act to facilitate the development of drugs for rare diseases and conditions, and for other purposes.|
|Enacted by||the 97th United States Congress|
|Effective||January 4, 1983|
|Statutes at Large||96 Stat. 2049|
|Acts amended||Federal Food, Drug, and Cosmetic Act|
|Titles amended||21 U.S.C.: Food and Drugs|
|U.S.C. sections amended||21 U.S.C. ch. 9 §§ 301 et seq., 360aa|
Orphan drug designation does not indicate that the therapeutic is either safe and effective or legal to manufacture and market in the United States. That process is handled through other offices in the US Food and Drug Administration. Instead, the designation means only that the sponsor qualifies for certain benefits from the federal government, such as reduced taxes.
In 1982 an informal coalition of supporters and families of patients with rare diseases who formed National Organization for Rare Disorders (NORD) and others, called for change to legislation to support development of orphan drugs, or drugs for treating rare diseases. They succeeded in getting the United States Congress to pass the Orphan Drug Act (ODA) in early 1983. The National Organization for Rare Disorders (NORD), who worked towards the introduction and passing of the Orphan Drug Act estimated that in 2014 there were 30 million Americans who suffer from 7,000 rare diseases. Only thirty-eight orphan drugs had been approved prior to the 1983 Act; by 2014 "468 indication designations covering 373 drugs have been approved." Partly as a result of the 1983 US Orphan Drug Act, Japan adopted it in 1993 as did the European Union in 2000.
Emergence of orphan diseases
In response to incidents such as difficulties with thalidomide the Kefauver-Harris Amendment was passed. Kefauver-Harris was passed in order to require that all drugs approved for sale be proven safe and effective via rigorous scientific studies. While this legislation improved drug safety, it also dramatically increased the costs associated with developing new medicines. Pharmaceutical companies responded by focusing on developing treatments for common diseases in order to maximize the possibility of recouping research and development costs and generating significant profits. As a result, rare diseases were largely ignored due to poor economic potential and were thus said to be "orphaned." The gap between drugs for common versus rare diseases eventually widened to the point where few or no treatments were available for some rare conditions such as Crohn's disease, Hansen's disease, etc.
Orphan drugs generally follow the same regulatory development path as any other pharmaceutical product, in which testing focuses on pharmacokinetics and pharmacodynamics, dosing, stability, safety and efficacy. However, some statistical burdens are lessened in an effort to maintain development momentum. For example, orphan drug regulations generally acknowledge the fact that it may not be possible to test 1,000 patients in a phase III clinical trial, as fewer than that number may be afflicted with the disease in question.
Since the market for any drug with such a limited application scope would, by definition, be small and thus largely unprofitable, government intervention is often required to motivate a manufacturer to address the need for an orphan drug.
The intervention by government on behalf of orphan drug development can take a variety of forms:
- Tax incentives.
- Enhanced patent protection and marketing rights.
- Clinical research subsidies.
- Creating a government-run enterprise to engage in research and development.
The plight of patients suffering from rare diseases became an important political issue in the late 1970s and early 1980s. The US government was subject to pressure from activist groups such as NORDand many others.
The chief sponsor of the bill (H.R. 5238) was Henry Waxman (sometimes referred to as the author of the Act), chairman of the Energy and Commerce Subcommittee on Health. It passed the House of Representatives on 14 December 1982, and was similarly approved by voice vote in the Senate on 17 December. On 4 January 1983, President Ronald Reagan signed the ODA into law. Under the ODA drugs, vaccines, and diagnostic agents would qualify for orphan status if they were intended to treat a disease affecting less than 200,000 American citizens. In order to encourage the development of drugs for orphan diseases, the ODA included a number of incentives including seven-year market exclusivity for companies that developed orphan drug, tax credits equal to half of the development costs, later changed to a fifteen-year carry-forward provision and a three-year carry-back that can be applied in profitable year, grants for drug development, fast-track approvals of drugs indicated for rare diseases, and expanded access to the Investigational New Drug Program. The law was also later amended to waive user fees charged under PDUFA.
Market exclusivity is particularly appealing to pharmaceutical firms as an incentive to pursue orphan drug development. The seven-year market exclusivity period differs from traditional patent law in that it does not begin until the drug is granted FDA approval and is independent of the drug's current patent status. Furthermore, if a market competitor wishes to introduce a drug for the same indication, the onus is on the competitor to prove that their drug is therapeutically superior (e.g. increased efficacy, less toxicity, etc.) when compared to the present drug indicated for the rare disease of interest. This incentive creates an attractive monopolistic market for companies interested in developing a product for any given rare disease.
Television historian and Allmovie contributor Hal Erickson credits two episodes of the television series Quincy, M.E. for helping the ODA pass in the USA: "Seldom Silent, Never Heard" (1981) and "Give Me Your Weak" (1982). The show's star, Jack Klugman, even testified before Congress concerning the orphan drug issue.
Drug companies nearly universally believe the ODA to be a success. Before Congress enacted the ODA in 1983 only 38 drugs were approved in the USA specifically to treat orphan diseases. In the USA, from January 1983 to June 2004, a total of 1,129 different orphan drug designations have been granted by the Office of Orphan Products Development (OOPD) and 249 orphan drugs have received marketing authorization. In contrast, the decade prior to 1983 saw fewer than ten such products come to market. From the passage of the ODA in 1983 until May 2010, the FDA approved 353 orphan drugs and granted orphan designations to 2,116 compounds. As of 2010, 200 of the roughly 7,000 officially designated orphan diseases have become treatable. In 2010, drugmaker Pfizer established a division to focus specifically on the development of orphan drugs as other large pharmaceutical companies focused greater efforts on the orphan drug research.
Some critics have questioned whether orphan drug legislation was the real cause of this increase (claiming that many of the new drugs were for disorders that were already being researched anyway, and would have had drugs developed regardless of the legislation), and whether the ODA has really stimulated the production of truly non-profitable drugs; the act also received some criticism for allowing some pharmaceutical companies to make a large profit off of drugs that have a small market but still sell for a high price. While orphan drug status is given to drugs with "no reasonable expectation" of profitability, some orphan drugs have gone on to net large profits and/or receive widespread use. The topic of profit in the aftermath of the ODA was addressed in November 2013 in the Seattle Times where the following quote appeared:
The [pharmaceutical] industry has taken advantage of the incentives to charge excessive profits and to reap windfalls far in excess of their investments in the drug.—Henry Waxman, primary sponsor of the ODA
In an effort to reduce the burden on manufacturers applying for orphan drug status, the FDA and EMA agreed in late 2007 to utilize a common application process for both agencies. However, the two agencies will continue to maintain separate approval processes.
- Parisse-Brassens, Jerome (July 2007). "Abbey Meyers, President of NORD, announces her retirement". European Organization for Rare Disorders. Retrieved 14 February 2009.
- "Millions Around World to Observe Rare Disease Day". PR Newswire. 13 February 2009. Retrieved 14 February 2009.
- Henkel, John (1999). "Orphan Drug Law Matures into Medical Mainstay". FDA Consumer. U.S. Food and Drug Administration. Retrieved 14 February 2009.
- Hadjivasiliou, Andreas (October 2014), "Orphan Drug Report 2014" (PDF), EvaluatePharma, retrieved 28 June 2015
- Cheung, Richard Y.; Cohen, Jillian; Illingworth, Patricia (Jan 2004). "Orphan Drug Policies: Implications for the United States, Canada, and Developing Countries". Health Law Journal (Canada: Health Law Institute) 12: 183–200 – via ResearchGate. (registration required)
- "IN their words". News. Nature Biotechnology (paper) 31 (12). Dec 2013. p. 1062.
- Erickson, Hal. "Quincy, M.E.: Seldom Silent, Never Heard (1981) - Jeffrey Hayden; Synopsis, Characteristics, Moods, Themes and Related". AllMovie. All Media Network. Overview. Retrieved 2010-06-07.
- Erickson, Hal. "Quincy, M.E.: Give Me Your Weak (1982) - Georg Fenady; Synopsis, Characteristics, Moods, Themes and Related". AllMovie. All Media Network. Overview. Retrieved 2010-06-07.
- Jack Klugman calls it quits after seven seasons as 'Quincy', St. Petersburg Times - Jul 3, 1983
- Klugman winds up his 'Quincy' career, The Deseret News - Mar 23, 1983
- Armstrong, Walter (May 2010). "Pharma's Orphans". Pharmaceutical Executive.
- Rich Daly (5 September 2002). "House Offers Incentives For Development of 'Orphan' Drugs". Congressional Quarterly Daily Monitor.
- Grogan, Kevin (15 June 2010). "Bookmark and Share Pfizer creates orphan disease research division". Pharma Times. Retrieved 28 March 2011.
- Conway, Benjamin (1 March 2010). "Big Pharma Reassesses Orphan Drug Sector". Wall Street BioBeat. Retrieved 28 March 2011.
- Schulte, Fred (18 December 2007). "Drug earning millions despite 'orphan' label". Baltimore Sun. Retrieved 28 March 2011.
- Wellman-Labadie, Olivier; Zhou, Youwen (1 May 2010). "The US Orphan Drug Act: Rare disease research stimulator or commercial opportunity?" (PDF). Health Policy 95 (2-3): 216–228. doi:10.1016/j.healthpol.2009.12.001. Retrieved 28 March 2011.
- Donna Young (2007-11-28). "U.S., EU Will Use Same Orphan Drug Application.". BioWorld News (Washington). Archived from the original on 2007-12-11. Retrieved 2008-01-06.
In an attempt to simplify the process for obtaining orphan status for medications targeting rare diseases, the FDA and the European Medicines Agency (EMA) have created a common application. ... U.S. and European regulators still will conduct independent reviews of application submissions to ensure the data submitted meet the legal and scientific requirements of their respective jurisdictions, the agencies said.
- Peters, Gerhard; Woolley, John T. "Ronald Reagan: "Statement on Signing the Orphan Drug Act ," January 4, 1983". The American Presidency Project. University of California - Santa Barbara. Retrieved 19 December 2013.