Orphan Drug Act of 1983

/ ShineKid

Original link: https://shinekid.com/2022/11/orphan-drug-act-of-1983/

The Orphan Drug Act of 1983 is a law passed by the United States to facilitate the development of orphan drugs; orphan drugs are drugs used to treat rare diseases such as Huntington’s disease, myoclonus, ALS Dystrophy, Tourette Syndrome, Muscular Dystrophy, etc., and these diseases affect a small number of people living in the United States. Being designated as an orphan drug does not mean that the treatment is safe and effective or that it can be legally manufactured and sold in the United States, and that process should be the responsibility of other offices of the US Food and Drug Administration; instead, sponsors can only qualify from the federal government. Get some perks like market exclusivity or tax breaks.

In 1982, the American Rare Disease Organization and other coalitions of families and supporters of rare disease patients called for legislative changes to facilitate the development of orphan drugs and other treatments for rare diseases. They succeeded in getting the bill passed by the US Congress in early 1983. Before the bill passed, there were only 38 orphan drugs approved in the United States; by 2014, “373 drugs covering 468 conditions have been approved.” Partly as a result of the Orphan Drugs Act 1983, Japan and the European Union adopted similar laws in 1993 and 2000, respectively.

Legislative background

Problems arise

The Kiefover-Harris Amendment was passed in 1962 as an amendment to the Federal Food, Drug, and Cosmetic Act, which was originally intended to address the “thalidomide event” caused by Thalidomy. Under the Kiefover-Harris Amendment, all drugs approved for sale in the United States must be proven safe and effective through rigorous scientific research. While this legislation has improved drug safety, it has also greatly increased the costs associated with developing new drugs. Pharmaceutical companies have responded by focusing on developing treatments for common diseases in order to maximize R&D costs and generate substantial profits. As a result, rare diseases are largely ignored due to their low economic potential, and are therefore referred to as “orphans”. The R&D gap between common and rare disease drugs eventually widens to the point where some rare diseases (eg, Crohn’s disease, leprosy, etc.) have little or no treatments.

The key issue

Orphan drug development typically follows the same regulatory development process for other drug products, where testing is required to focus on pharmacokinetics, pharmacodynamics, dose titration, stability, safety, and efficacy. However, in order to maintain the momentum of orphan drug development, some statistical requirements have been appropriately reduced. For example, orphan drug regulations generally recognize that orphan drugs may not meet the 1,000-patient criteria tested in Phase III clinical trials because the number of people affected by the disease may be less than that threshold.

According to the definition of orphan drugs, the market size of its potential application is very small, so the economic prospects are not optimistic. Precisely because drugmakers are basically unprofitable, government intervention is needed to stimulate drugmakers to solve problems such as the development and production of orphan drugs.

Among the interventions that the government can take include, but are not limited to, the following methods:

  • tax relief;
  • Strengthen the protection of patent rights and sales markets;
  • subsidy for clinical research;
  • Establish state-owned enterprises to engage in research and development.

Legislation passed

The plight of rare disease patients became a major political issue in the United States in the 1970s and 1980s, and the U.S. government came under pressure from organizations such as the Rare Diseases of America and many others.

The main sponsor of the bill was Rep. Henry Waxman, D-Calif., in the U.S. House of Representatives, who at the time was chairman of the health and environment subcommittee under the House Energy and Commerce Committee. It was passed in the House of Representatives on December 14, 1982, and in the same manner in the Senate on December 17 of the same year. President Ronald Reagan signed this Act into law on January 4, 1983.

Under the Orphan Drug Act, drugs, vaccines and diagnostics will qualify for orphan drug status if they are designed to treat a disease that affects fewer than 200,000 U.S. citizens. In order to encourage the research and development of orphan drugs, the Orphan Drug Act includes a number of incentives, such as: seven years of market exclusivity for pharmaceutical companies developing orphan drugs; deduction of corporate tax equivalent to the cost of research and development (later changed to 15-year carry-forward and 3-year rebate tax credits that can be applied in the drug’s profitable year); drug development subsidies, and increased access to experimental new drug program eligibility. Subsequent amendments to the Act also waived fees that would have been payable under the Prescription Drug User Fees Act.

Among these incentives, market exclusivity is particularly attractive to pharmaceutical companies. The seven-year market exclusivity period is not the same as the traditional patent protection period, because the exclusivity period does not start until the US Food and Drug Administration officially approves the drug for marketing, and it is independent of the patent status of the drug. In addition, if a competitor wants to launch a drug for the same indication, the drugmaker is obligated to demonstrate that its drug is therapeutically superior to an existing drug for the rare disease of interest (eg: stronger efficacy or less toxic side effects, etc.). This incentive creates an attractive monopoly market for companies interested in developing products for any given rare disease.

Television historian and AllMovie contributor Hal Erickson credits the passage of the Orphan Drug Act with episodes of “Seldom Silent, Never Heard” and “Give Me Your Weak” on the TV series “Forensic Quincy” content, the above two episodes premiered in the United States in 1981 and 1982. Even the show’s actor, Jack Klugman, even testified before the U.S. Congress on the orphan drug issue.

Legislative effect

On the pharmaceutical company side, the Orphan Drug Act is almost universally considered a success. Before the U.S. Congress enacted the Orphan Drug Act in 1983, the U.S. government had only approved 38 orphan drugs for the treatment of rare diseases. After the bill was passed, between 1983 and 2015 alone, the U.S. Food and Drug Administration approved 552 orphan drugs, and 3,633 compounds received orphan drug status. And as of 2010, 200 of the roughly 7,000 U.S. officially recognized rare diseases are treatable. Large pharmaceutical companies including Pfizer may set up specialized orphan drug research and development departments, or invest more research and development efforts on orphan drugs.

However, there are also many critics who question whether the legislation on orphan drugs really promotes the development of orphan drugs. They believe that many new drugs are originally developed for the diseases under study, so drugs will be developed regardless of whether there is special legislation. Does the Drug Act actually stimulate the production of those truly non-profit drugs? Also, the Orphan Drug Act has been criticized for allowing some pharmaceutical companies to sell high-priced orphan drugs from small markets for rare disease drugs. Although the legislative intent of the bill is to grant orphan drug status to drugs that are “not reasonably expected” to be profitable, in fact some orphan drugs have captured huge net profits and or achieved widespread use. In November 2013, The Seattle Times quoted the following statement on the issue of profits after the enactment of the Orphan Drug Act:

The (pharmaceutical) industry uses incentives to collect excess profits and reap windfalls that far exceed their drug investments.

–Henry Waxman, lead proponent of the Orphan Drug Act

Modafinil was once an orphan drug, but after its launch it became a big hit and became a blockbuster for other diseases.

Regulatory coordination

To ease the burden of applying for orphan drug status on drugmakers, the US Food and Drug Administration and the European Medicines Agency agreed in late 2007 that the two agencies would use a common application process. However, approval for orphan drug status will remain separate from the two agencies.

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