FDA Commissioner Scott Gottlieb announced that he is taking steps to deal with abuses in the development of sorphan drugs by closing lucrative loopholes open to pharmaceutical companies. The Orphan Drug Act of 1983 provides incentives to research and produce drugs used to treat rare conditions. Incentives to produce drugs that be otherwise financially infeasible to produce include tax credits, fee waivers and seven years of exclusivity in the market. Orphan drugs are medications developed to treat rare diseases affecting populations of less than 200,000 people.
Orphan Drugs Are A High Stakes Game
The stakes can be quite high. Drug companies with the exclusive right to market an orphan drug can charge six figure sums for the medications. A significant loophole enables drugs developed for mass market purposes to receive the “orphan” designation when they can also be used to treat a rare disease. In some cases drugs are granted orphan status to treat multiple diseases. Whether a drug is already approved for mass market use or is granted “orphan” status multiple time, the manufacturer is receives a new package of incentives in every case. There are now 80 orphan drugs approved by the FDA to treat more than one rare condition.
An investigation by Kaiser Health found that of the 450 drugs granted “orphan” status since 1983, 70 of them were for drugs that the FDA approved for mass-market purposes. These drugs were given orphan status when also used to treat rare diseases. They include household names like Crestor, Abilify and Humira. Humira, used to treat rheumatoid arthritis is the world’s best selling drug. In fact, seven of the 10 top selling drugs in the country are classified as “orphans.”
FDA Commissioner Scott Gottlieb also intends to close a loophole that permits mass market drugs to skip pediatric testing when companies seek orphan status for the treatment of rare childhood diseases. These moves are the first in what Gottlieb announced would be a series on changes affecting the “orphan” designation. The Congressional GAO (General Accounting Office) is also due to begin an investigation later this year.