FDA Clarifies the Orphan Drug Act

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FDA regulation seeks to encourage development of drugs for rare diseases.

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Orphan diseases afflict over 25 million Americans. An orphan disease is an illness that affects a relatively small part of the population, specifically fewer than 200,000 Americans. Unfortunately, there are many such orphan diseases, including cystic fibrosis, Wilson’s disease, and Crohn’s disease.

Prior to the passage of the Orphan Drug Act (ODA) in 1983, most pharmaceutical manufacturers failed to do much research to develop treatments for orphan diseases, believing that it would be “nearly impossible…to recoup their investment” due to the relatively small patient populations for each disease.

The ODA, widely perceived as a success, encourages the manufacture of orphan drugs by providing tax credits to companies that have invested in researching the development of treatments for orphan diseases. The ODA also offers companies seven years of market exclusivity to drugs proven safe and effective for treatment of orphan diseases. Additionally, these drugs are guaranteed faster regulatory reviews and assistance from FDA reviewers during their development and review processes.

Since the ODA’s passage, the Food and Drug Administration (FDA) has approved more than four hundred so-called orphan drugs – up from a mere ten during the preceding decade. Nevertheless, controversy has existed over some drug manufacturers exploiting the ODA by marketing orphan-approved drugs for non-orphan use or by monopolizing drug markets. Recently, the FDA has issued final regulations that seek to clarify the ODA in an attempt to ameliorate these problems.

In its new regulation, the FDA clarified the meaning of an “orphan subset,” a statutory term that denotes eligibility for orphan drug designation. According to the regulation, orphan subsets are patient populations with diseases that affect 200,000 or more people but whose drugs would only apply to a subset of those affected people. The FDA explained that drugs are sometimes appropriate for use only to subset populations of a disease, and thus FDA approval is inapplicable to the broader population due to some properties of the drug, such as toxicity.

The FDA believes that drug companies were previously seeking out the narrowest possible orphan subsets “to avail themselves of orphan-drug benefits when the overall approved use is not an orphan use.” According to the FDA, clarifying orphan subsets will help prevent drug sponsors from continuing such gamesmanship.

In addition to clarifying orphan subsets, the FDA also said that it considers drugs as orphan drugs even if it they are applicable to other diseases. However, the FDA then specified that the drugs’ patient populations of each applicable disease must still be fewer than 200,000 people. Moreover, the FDA said that some new dosage forms of already approved drugs might be “eligible for their own seven-year period of orphan exclusive approval,” as long as they are clinically superior to previously approved dosages.

Despite the new regulation, several comments filed with the FDA argue that the ODA is not fair to protein therapies for designation as orphan drugs. Many plasma proteins, which are biologics derived from human plasma, have the same principal molecular structure as already approved orphan drugs. Due to these molecular similarities, the FDA does not consider the therapies as distinct entities for the purposes of ODA eligibility and market exclusivity.

To surmount this difficulty and achieve market exclusivity, sponsors must demonstrate the drugs’ clinical superiority to the already-approved products. Michelle Butler, a lawyer with Hyman, Phelps & McNamara who filed a white paper with the FDA, argues that the bar for demonstrating clinical superiority is too high.

After consideration of the comments, the FDA responded that it “appreciated this perspective from industry about the impact that obtaining – or not obtaining – orphan drug designation under the ODA may have” but that it does not intend to amend its current interpretation of the ODA. Rather, the FDA replied that it “continues to believe that the current framework is the best means for giving effect to the intent of the ODA, to provide incentives for sponsors to develop promising drugs for rare diseases…including drugs that are potentially safer or more effective than already approved drugs.”

Nevertheless, the FDA announced that it is “considering the feasibility of issuing a draft guidance document on what may constitute a plausible hypothesis of clinical superiority for certain categories of products, for example plasma-derived products, which may help address some of the concerns articulated previously.”

This potential guidance is not listed in the Center for Biologics Evaluation and Research’s (CBER) planned guidance documents for 2013. Thus, the guidance might not be issued before 2014, if at all.