The US orphan-drug (OD) program has demonstrated that economic incentives and regulatory flexibility can spur development
of treatments for small patient populations that were previously considered unprofitable. Before the enactment of the Orphan
Drug Act (ODA) in 1983, pharmaceutical companies had produced only a handful of drugs for rare diseases. This situation changed
when patient advocates pushed for legislation that encourages industry to bring ODs to market.
The results are cause for celebration. The US Food and Drug Administration's OD program is a "tremendous triumph," commented
Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER), at a May conference commemorating ODA's 25th
anniversary sponsored by the Drug Information Association (DIA). FDA has awarded OD status to 1850 products over the past
25 years. The awards have resulted in 326 approved medications that are used by about 12 million patients worldwide. Yet roughly
6000 to 8000 rare diseases still exist, Woodcock noted, so "we still have a very long way to go."
Woodcock expressed optimism that the emergence of molecular medicine will provide knowledge that can help identify more orphan
conditions. Recent genomic discoveries can expand scientists' understanding of many serious conditions. In addition, personalized
medicine promises more effective treatment and fewer side effects for many medicines. At the same time, high prices for many
ODs, which reflect their development and production costs, create challenges for insurance coverage and patient access.
Before the ODA, pharmaceutical companies did not invest resources in developing drugs that were unlikely to make a profit,
noted Abbey Meyers, prime mover behind ODA and founder of the National Organization for Rare Disorders (NORD). Patient groups
thus looked to academia and the National Institutes of Health (NIH) for new treatments. But mention of the rare-disease problem
on the popular TV show Quincy and new approaches to spur industry involvement prompted policymakers to examine the problem seriously.
The result was legislation sponsored by Rep. Henry Waxman (D-CA) that offered powerful economic incentives for drug companies
to produce ODs. Most important in the legislation is the seven years of exclusivity for an approved OD. During the exclusivity
period, no other company may sell the same drug to treat the same rare disease. In addition, there is a 50% tax credit for
clinical-study costs as well as grants to support clinical research and FDA protocol assistance. These benefits are particularly
important for small companies. Patients who were unable to participate in clinical trials also gained access to experimental
treatments. Additional legislation in 1985 added biologics to the program and more clearly defined ODs as treatments for diseases
that affect fewer than 200,000 people in the US.
Jason Reed/Getty Images
But the incentives for industry also generated controversy. Some orphan therapies such as human growth hormone became immensely
profitable, raising questions about exclusivity and manufacturer "salami slicing," a strategy by which sponsors would seek
OD status for a narrow indication and then promote the drug to much broader populations. "Many of the controversies over drugs
that became profitable were spurred by competitors who lost the race to approval," Meyers commented. "NORD's greatest service
has been to protect ODA from changes."