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What do Amgen, Biogen, Enzon,
Genentech, Pathogenesis,
and Sigma Tau have in
common?
All are
successful companies
founded upon an initial
drug product, which had
“orphan” status in
an FDA program to
develop “orphan “
products. There are
substantial financial
and intellectual
property incentives, tax
credits, grants for
clinical development,
and “ombudsman-type” assistance to encourage development of
drugs for rare diseases
and medical conditions.
In 1983, the Congress enacted the
Orphan Drug Act (ODA)
and created the program.
That the program
is an outstanding
success is now clear.
Over the last two
decades, 226 “orphans”
are on the market, with
another 1000 products in
the pipeline.
By providing
needed therapy for a
previously neglected
patient segment, upwards
of 50 or 60 new drug
companies have been
created.
Generally, a disease or medical
condition is considered
“rare” if there are
less than 200,000
patients in the United
States affected. The 200,000 is interpreted as “prevalence” rather than
incidence. The specific
program requirements,
and benefits, a list of
“designated”
products and related
materials are at http://www.fda.gov/orphan.
Scientists and
entrepreneurs alike have
taken the
“designation” status
and grant awards to
“the bank” to raise
capital to finance the
research, development,
and marketing.
To qualify for the
benefits, with the
exception of grant
funding, the orphan
product must be a drug.
The program will
fund grant requests for
medical foods and
devices, however, the
principal focus is on
human clinical trials
for drugs intended to
treat or prevent rare
diseases and medical
conditions.
About 30 of the
226 marketed orphan
products are program
grant benefactors.
An application seeking an
orphan drug designation
must demonstrate a valid
medical rationale for
the indication sought;
present evidence
and references to
document that the
proposed indication
qualifies within the
program’s prevalence
or economic limits; and
demonstrate that the
product with the
proposed indication is
not marketed in the U.S.
The application must
also include appropriate
literature references, as well as, the regulatory history of the drug substance.
Further details are in
the regulations.
After a review,
usually within 60 days,
FDA will grant or deny
“orphan” status. The
application date is very
important.
Once submitted,
the state of the art,
population, medical
rationale, etc., are (by
statute) frozen as of
the application date.
This assures that a
designation decision
made in 1994 is not
overtaken by
circumstances during the
development period when
the marketing approval
decision comes up in
2003.
There is no list of rare
diseases and conditions.
A credible medical rationale for why a drug should be given
orphan status, whether
or not it has already
been marketed for other
indications, for an
indication for less than
200,000 patients is all
that is required. Each
designation stands on
its own rationale and
evidence. Generally, pediatric indications for popular drugs qualify,
as do many cancer
indications, groups of
patients refractory to existing treatments for a more widespread
serious or
life-threatening
condition, and rare
diseases and genetic
disorders readily
cognizable as rare.
Once designated, the
term of art for those
FDA classifies as
orphans, the sponsor is
entitled to a federal
income tax credit of 50%
of all expenditures for
human clinical trials
for the orphan
indication. This credit accumulates each year if not used, and can
be carried forward 20
years, presumably when
revenues produce a
profit to be taxed.
This is a
government partnership
for one-half of these
development costs and
provides immediate value
equal to the tax credit
for the venture.
Furthermore, the “user
fee”($533,000for FY
2003) payable when the
FDA marketing
application is
submitted, is waived. Annual
assessments of drug
producing facilities and
marketed products may be
waived for eligible
products on a case
basis.
The most sought after
incentive is the orphan
marketing exclusivity.
The ODA
assures the
designated orphan
product has the
exclusive right to claim
its orphan indication
for the initial
seven-year period of
marketing. During the
exclusivity period, FDA may not approve another “same” product for the same
indication.
This is an
absolute bar enforced by
the government at the
market entry stage, and
is not subject to
interference challenges
like a patent.
When confronted with a
Congressional amendment
to alter the orphan
product exclusivity
period in
1990, the
then President George (H.W.)
Bush explained why he
chose to pocket veto the
measure:
“I have
serious concerns about
the effect that H.R.
4638 would have upon the
incentive of drug
companies to develop
orphan drugs. I believe
we must not endanger the
success of this program,
which is due in large
measure to the existence
of the ‘market
exclusivity’ provision
in the Orphan Drug Act
that allows companies to
have exclusive marketing
rights to an orphan drug
for 7 years. Weakening
the current 7-year
exclusivity provision
would certainly
discourage development
of desperately needed
new orphan drugs.”
This is a federal program that is
straightforward, gives a
fast decision, and can
be the foundation for
proving a new
technology(Enzon) or
substance (Amgen), which
can give rise to a whole
company.
** This presents
personal views and not
necessarily those of the
FDA or the Office of
Orphan Products
Development, other than
these individuals.
Robert (Bob) Steeves, a
pharmacist and lawyer,
serves as Director,
Economic and Program
Policy Staff, FDA Office
of Orphan Products
Development.. He served in the White House Office of Public Liaison as the
Deputy Special Adviser
to the President
(Reagan) for Consumer
Affairs, and also served
as a Deputy Associate
Commissioner in the
FDA's Office of
Legislative Affairs.
Email:
rsteeves@oc.fda.gov.
Sarah Kim has a Doctor of Pharmacy,
currently works in
Global Medical Services
at Abbott Laboratories
in Abbott Park,
Illinois.
She worked one
year with
Schering-Plough
Corporation’s Business
Unit.
Prior to her
career in pharmacy, she
worked and studied
abroad in Europe and in
Asia teaching and
studying language and
linguistics, focusing on
French, English and
Korean.
Sarah has
internship experience at
FDA with the Office of
Special Health Issues.
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